EXHIBIT 2(a)
STOCK AND ASSET PURCHASE AGREEMENT
STOCK AND ASSET PURCHASE AGREEMENT, dated as of July 9,
1998, between X. X. Xxxx, Inc., a corporation organized and
existing under the laws of the State of New Jersey ("Seller"), and
Arterial Vascular Engineering, Inc., a corporation organized and
existing under the laws of the State of Delaware ("Buyer").
Seller and its subsidiaries (which, until the Closing
Date, shall include the Subsidiaries) are engaged in, among other
things, the research, development, manufacture, production,
marketing, advertising, distribution, licensing, use, offer for
sale and sale, worldwide, of coronary catheter lab products which
include (i) PTCA balloon catheters; (ii) coronary stents, excluding
myocardial stents (as further described in Schedule 4.7(i));
(iii) saphenous vein graft stents for coronary applications;
(iv) PTCA guidewires; (v) PTCA guide catheters; (vi) coronary
diagnostic catheters; (vii) coronary introducers; (viii) coronary
diagnostic guidewires; (ix) femostop; (x) vessel closure devices
for coronary applications; (xi) right heart pressure monitoring
catheters; (xii) PTCA accessories; (xiii) coronary angiographic
accessories; (xiv) coronary OEM products; and (xv) related coronary
components and accessories (the "Business").
Seller desires to sell, and Buyer desires to purchase,
the Business.
Seller and Buyer desire to enter into the other on-going
and transitional arrangements contemplated hereby.
Upon the terms and subject to the conditions set forth
herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK AND ASSETS
1.1 Stock; Assets; Liabilities. (a) Stock Purchase.
Upon the terms and subject to the conditions of this Agreement, at
the Closing: (i) Seller shall sell to Buyer or one or more of its
Designees, and Buyer shall or shall cause one or more of its
Designees to purchase, all of the capital stock owned by Seller of
CorMedica Corporation, a Delaware corporation ("CorMedica"), (ii)
Seller shall cause Bard International, Inc., a Delaware corporation
("Bard International"), to sell to Buyer or one or more of its
Designees, and Buyer shall or shall cause one or more of its
Designees to purchase, all of the capital stock of Bard Japan
Limited, a Japanese corporation ("Bard Japan"), (iii) Seller shall
cause Xxxx Xxxxxxx Ltd., an Irish corporation ("Xxxx Xxxxxxx"), to
sell to Buyer or one or more or its Designees, and Buyer shall or
shall cause one or more of its Designees to purchase, all of the
issued share capital owned by Xxxx Xxxxxxx in X. X. Xxxx Ireland
Ltd., an Irish corporation ("Bard Ireland"), (iv) Seller shall
cause Xxxx Xxxxxxx to sell to Buyer or one or more of its
Designees, and Buyer shall or shall cause one or more of its
Designees to purchase, all of the issued share capital owned by
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Xxxx Xxxxxxx in Bard Galway Ltd., an Irish corporation ("Bard
Galway"), (v) provided third party consents required in connection
with such sale are obtained, Seller shall cause Xxxx Xxxxxxx to
sell to Buyer or one or more of its Designees, and Buyer shall or
shall cause one or more of its Designees to purchase, all of the
share capital owned by Xxxx Xxxxxxx of Milu S.A., a Luxembourg
corporation ("Milu"), and (vi) provided third party consents
required in connection with such sale are obtained, Seller shall
cause Xxxx Xxxxxxx to sell to Buyer or one or more of its
Designees, and Buyer shall or shall cause one or more of its
Designees to purchase, all of the quotas owned by Xxxx Xxxxxxx of
X-trode S.r.l., an Italian corporation ("X-trode"). Bard Japan,
Bard Ireland, Bard Galway, Bard Connaught, an Irish corporation
("Bard Connaught"), Milu (but only if third party consents required
in connection with the sale of the share capital of Milu owned by
Xxxx Xxxxxxx are obtained) and X-trode (but only if third party
consents required in connection with the sale of the quotas of X-trode
owned by Xxxx Xxxxxxx are obtained) are hereinafter referred
to individually as a "Subsidiary" and collectively as the
"Subsidiaries", and the capital stock of CorMedica owned by Seller,
the capital stock of Bard Japan, the issued share capital of Bard
Ireland and Bard Galway owned by Xxxx Xxxxxxx, the issued share
capital of Milu owned by Xxxx Xxxxxxx (but only if third party
consents required in connection with the sale of such share capital
are obtained) and the quotas of X-trode owned by Xxxx Xxxxxxx (but
only if the consents required in connection with the sale of such
quotas are obtained) are hereinafter referred to as the "Stock".
(b) Asset Purchase. Except as otherwise provided in
Section 1.1(c), upon the terms and subject to the conditions of
this Agreement, at the Closing, Seller shall, or shall cause its
subsidiaries (other than the Subsidiaries) to, sell, convey,
assign, transfer and deliver to Buyer and/or its Designees, and
Buyer and/or its Designees shall purchase, acquire and accept from
Seller or its subsidiaries (other than the Subsidiaries), as
appropriate, all of the Seller's and its subsidiaries' (other than
the Subsidiaries') right, title and interest as of the Closing Date
in and to all of the assets, properties, rights, goodwill,
privileges, claims and contracts of every kind and nature, real,
personal or mixed, tangible or intangible, absolute or contingent,
as set forth below, without duplication (such right, title and
interest in such assets, properties, rights, privileges, claims and
contracts being sold, conveyed, assigned, transferred and delivered
to Buyer or its Designees being referred to collectively as the
"Assets"):
(i) the assets reflected on the Final Statement of
Assets and Liabilities;
(ii) all packaging materials to the extent used or
intended to be used exclusively in connection with the
Business, wherever located on the Closing Date;
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(iii) all records, data (whether in hard copy or computer
form), customer lists, vendor lists, service provider lists,
promotional literature and advertising materials used, or
intended to be used, primarily for the marketing of products
of the Business, catalogs, research material, technical
information, blueprints, technology, technical designs,
drawings and specifications used, or intended to be used,
primarily in the Business on the Closing Date; it being
understood and agreed that following the Closing, copies of
such items used primarily but less than exclusively in the
Business shall be made available to Seller in accordance with
the terms of Section 4.9 hereof and copies of similar items
used in the Business but less than primarily shall be made
available to Buyer in accordance with the terms of Section 4.9
hereof;
(iv) all equipment, fixtures, furniture, furnishings,
machinery, tools and other tangible personal property which
are (A) located at the Facilities or at the buildings,
structures or other improvements leased pursuant to leases
identified or referred to in Section 1.1(b)(v) on the Closing
Date and, in either case, used primarily in connection with
the Business or (B) used exclusively in the Business on the
Closing Date (the "Machinery"), and all warranties and
guarantees, if any, express or implied, existing for the
benefit of Seller or its subsidiaries in connection with the
Machinery, to the extent transferable;
(v) to the extent applicable to the Business, all
agreements, contracts, maintenance and service agreements,
purchase orders, purchase commitments for raw materials, goods
and other services, advertising and promotional agreements,
leases (including without limitation leases for real
property), licenses (including without limitation licenses for
intellectual property), shipping agreements and collective
bargaining agreements (including all warranties,
representations and guaranties therein), including but not
limited to those set forth in Schedule 3.1(k) hereto (other
than the Material Subsidiary Contracts);
(vi) all licenses, permits, consents, approvals,
certificates, authorizations, qualifications, orders or
franchises, including, without limitation, any of the
foregoing issued under any Environmental Law and any of the
foregoing relating to any right in any particular country to
market the products of the Business, issued by any federal,
state, local or foreign governmental or regulatory authority
or organization which relate exclusively to the Real Estate,
the Facilities or the Business on the Closing Date, in each
case, to the extent transferrable (the "Permits");
(vii) subject to the Lease, the real property set forth in
Schedule 1.1(b)(vii) hereto (collectively, the "Real
Property"), including, without limitation, the buildings,
structures and other improvements situated thereon (the
"Facilities"), and all easements, privileges, rights-of-way,
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riparian and other water rights, lands underlying any adjacent
streets or roads and appurtenances pertaining to or accruing
to the benefit of such property, subject to the Permitted
Exceptions;
(viii) the other assets identified in Schedule
1.1(b)(viii), except to the extent that any such assets have
been disposed of not in violation of the provisions of Section
4.2 since the date of this Agreement;
(ix) subject to the IP Agreement, all unexpired domestic
and foreign patents, patent applications and Disclosures of
Inventions and any improvements, continuations, continuations-in-part,
divisionals, extensions, reissues, patents of
addition, reexaminations or substitutions thereof, any
subsequent filings in any country claiming priority therefrom
and any and all discoveries or inventions whether or not
embodied within the foregoing, and any right to use or exploit
any of the foregoing, in each case relating to the Business on
the Closing Date, including, but not limited to, the foregoing
identified in Schedule 1.1(b)(ix) hereto;
(x) subject to the IP Agreement and Section 4.10 hereof,
(A) all registered and unregistered unexpired domestic and
foreign trademarks, trademark registrations, trademark
applications, trade names, brand names, certification marks
and service marks; and (B) all state trademark registrations
and applications therefor, including, without limitation, any
extension, modification or renewal of any such registrations
or applications and all common law rights in such trademarks,
and any right to use or exploit any of the foregoing, in each
case including, without limitation, any goodwill associated
therewith and relating to the Business on the Closing Date,
including, but not limited to, the foregoing identified in
Schedule 1.1(b)(x) hereto;
(xi) subject to the IP Agreement, all original works of
authorship, including but not limited to, all copyrights and
registrations or applications for registration of copyrights
in any jurisdiction, including, without limitation, any
renewals or extensions thereof, advertising materials,
publications, technical papers and computer software, and any
right to use or exploit any of the foregoing, in each case
relating to the Business on the Closing Date, including but
not limited to, the foregoing identified in Schedule
1.1(b)(xi) hereto;
(xii) subject to the IP Agreement, all (A) patterns,
plans, designs, research data, trade secrets and other
proprietary know-how, formulae and manufacturing processes,
commercially practiced processes and inventions, in each case
whether or not patentable in any jurisdiction and (B)
operating manuals, drawings, technology, manuals, data,
records, procedures and research and development records, and
any right to use or exploit any of the foregoing, in each case
relating to the Business on the Closing Date (the
"Technology");
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(xiii) subject to the IP Agreement, all distinctive
features of the packaging for the products of the Business on
the Closing Date and any right to use or exploit any of the
foregoing (the "Trade Dress");
(xiv) all claims and causes of action (known or unknown
and asserted or unasserted) against other persons to the
extent arising out of or relating to the Assets or the
Business (other than claims or causes of action to the extent
arising out of or relating to (A) the Excluded Assets or (B)
Liabilities that are not Assumed Liabilities), including,
without limitation, the right to recover damages and losses
sustained by Seller or its subsidiaries prior to the Closing;
(xv) all computer systems, computer hardware, databases,
software programs, source codes and user manuals, which are
(A) located at the Facilities or at the buildings, structures
or other improvements leased pursuant to leases identified or
referred to in Section 1.1(b)(v) on the Closing Date and, in
either case, used primarily in connection with the Business or
(B) used exclusively in the Business on the Closing Date; it
being understood and agreed that following the Closing, copies
of such items (other than computer systems and computer
hardware) used less than exclusively in the Business shall be
made available to Seller in accordance with the terms of
Section 4.9 hereof and copies of similar items (other than
computer systems and computer hardware) used in the Business
but, in the case of clause (A), less than primarily and, in
the case of clause (B), less than exclusively, shall be made
available to Buyer in accordance with the terms of Section 4.9
hereof;
(xvi) the goodwill and going concern value of the
Business; and
(xvii) with respect to any claims or causes of action
against other persons to the extent arising out of or relating
to the Assets or the Business, any damages, judgments, fees,
costs or awards which become payable to Seller or its
subsidiaries between the date of this Agreement and the
Closing, subject to reversal or reduction by any appellate or
review process or proceeding (it being understood that any
such damages, judgments, fees, costs or awards shall not be
reflected as assets on the Final Statement of Assets and
Liabilities).
(c) Excluded Assets. Notwithstanding any provision in
this Agreement or the Ancillary Agreements, it is expressly
understood and agreed that all of the Seller's and its
Subsidiaries' (other than the Subsidiaries') right, title and
interest as of the Closing Date in and to the following assets,
properties, rights, goodwill, privileges, claims and contracts of
every kind and nature, real, personal and mixed, tangible or
intangible, absolute or contingent (such right, title and interest
being referred to herein as the "Excluded Assets") are specifically
excepted from the Assets to be transferred to Buyer or its
Designees pursuant to Section 1.1(b):
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(i) the consideration delivered to, or to the order of,
Seller pursuant to this Agreement;
(ii) all cash and cash equivalents or similar types of
investments, such as certificates of deposit, Treasury bills
and other marketable securities, except as provided in Section
4.5;
(iii) any refund or credits (including, without
limitation, interest thereon or claims therefor) with respect
to any Taxes for any period prior to the Closing Date,
including, without limitation, Taxes assessed against any Real
Property for any period prior to the Closing Date;
(iv) all insurance policies of Seller and its
subsidiaries (other than the Subsidiaries) and all rights of
Seller and its subsidiaries (other than the Subsidiaries) of
every nature and description under or arising out of such
insurance policies;
(v) except as provided in Section 1.1(b)(xvii) all
receivables (including without limitation, receivables
relating to VAT, freight and duty) of Seller and its
subsidiaries (other than the Subsidiaries) of a type that
would be reflected on a balance sheet prepared in accordance
with GAAP;
(vi) all rights of Seller under this Agreement and the
agreements and instruments delivered by Buyer or its
affiliates pursuant to or in connection with this Agreement;
(vii) assets relating to the Benefit Plans; and
(viii) any intercompany receivables reflecting indebtedness
from Seller and its subsidiaries (other than the
Subsidiaries), on the one hand, to any Subsidiary, on the
other hand (which will be governed by Section 4.3 hereof).
(d) Assumed Liabilities. Except as otherwise provided
in Section 1.1(e), on the Closing Date, Buyer shall, or shall
cause its Designees to, assume only the Liabilities of Seller
and its subsidiaries (other than the Subsidiaries) as set
forth below (the "Assumed Liabilities"):
(i) which are to be performed after the Closing Date
(or, in the case of contracts and agreements excluded from the
Assets pursuant to Section 4.6(e), which are to be performed
after the date such contract or agreement is deemed to be
assigned pursuant to Section 4.6(e)) under the agreements,
contracts, maintenance and service agreements, purchase
orders, purchase commitments for raw materials, goods and
other services, advertising and promotional agreements,
leases, licenses, shipping agreements and collective
bargaining agreements which are Assets pursuant to
Section 1.1(b)(v) hereto to the extent to which the foregoing
are applicable to the Business;
(ii) reflected as liabilities in the liabilities column
of the Final Statement of Assets and Liabilities;
(iii) under the Permits transferred to Buyer to the extent
relating to periods after the Closing Date; and
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(iv) in respect of Transferred Employees of Seller and
its subsidiaries (other than the Subsidiaries), any and all
obligations which (A) are not reflected on the Final Statement
of Assets and Liabilities, (B) relate to accrued vacation and
sick time as of the Closing Date and (C) when added to the
aggregate amount of such obligations of the Subsidiaries that
are not reflected on the Final Statement of Assets and
Liabilities do not exceed $300,000 in the aggregate.
Buyer acknowledges that, except as otherwise provided herein
and subject to the provisions hereof, the Liabilities of the
Subsidiaries existing as of the Closing Date shall remain
Liabilities of the Subsidiaries following the Closing Date.
(e) Liabilities Not Assumed. Notwithstanding any
provision in this Agreement or the Ancillary Agreements, Buyer and
its Designees shall not assume, shall not take subject to and shall
not be liable for (and the Assumed Liabilities shall not include)
the Liabilities as set forth below:
(i) except as provided in Section 1.1(d)(ii), any
Liabilities to the extent not incident to, or arising out of
or incurred with respect to, the Business;
(ii) except as provided in Section 1.1(d)(ii), any
Liabilities directly or indirectly arising out of or relating
to the Excluded Assets;
(iii) all Liabilities resulting from any Legal Proceedings
pending as of the Closing Date and any property damage,
personal injury, death, product recall or other similar
Liability arising out of products manufactured or distributed
prior to the Closing Date (other than such Liabilities to the
extent arising out of or resulting from the shipment, storage,
handling or labelling (or any acts or omissions in respect
thereof) of such products by Buyer, any of its affiliates or
any of their direct or indirect distributors or agents after
the Closing Date);
(iv) any Liabilities arising out of or relating to any
Environmental Laws in respect of any condition existing on the
Closing Date that constitutes a violation of any Environmental
Law or that would require under Environmental Laws any
investigation, cleanup, remediation or removal actions with
respect to the presence of Hazardous Materials;
(v) any Liability for which Seller or any of its
subsidiaries (other than the Subsidiaries) expressly has
responsibility pursuant to the terms of this Agreement or any
of the Ancillary Agreements;
(vi) except as provided under Section 4.6(e) hereof,
Liabilities arising under any contract or agreement excluded
from the Assets pursuant to Section 4.6(e) hereof until such
time as such contract or agreement is deemed to be assigned to
Buyer pursuant to Section 4.6(e) hereof; or
(vii) except as provided under Sections 1.1(d)(i) and
(ii), any indebtedness for borrowed money (including, without
limitation, as evidenced by bonds, notes, indentures or
similar instruments) or for the deferred purchase price of
property or services, or guarantees therefor.
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Seller acknowledges that Buyer and its Designees are not
assuming any Liabilities of any nature other than the Assumed
Liabilities.
1.2 Assumption of Liabilities; Purchase Price. Subject
to adjustment as set forth in Section 1.3, upon the terms and
conditions of this Agreement, on the Closing Date, in consideration
for the sale and transfer of the Assets and the Stock, Buyer or its
Designees, as applicable, shall assume and discharge or perform
when due the Assumed Liabilities and pay to, or to the order of,
Seller by wire transfer in immediately available funds in U.S.
dollars an amount equal to $550,000,000 (Five Hundred and Fifty
Million Dollars) (the "Purchase Price") in accordance with written
instructions given by Seller to Buyer not less than two business
days prior to the Closing. The Purchase Price shall be allocated
in accordance with the terms of Section 6.4 hereof.
1.3 Adjustment to Purchase Price.
(a) Preparation of Preliminary Closing Statement of
Assets and Liabilities. As soon as reasonably possible after the
Closing Date (but not later than 60 days thereafter), Seller shall
prepare or cause to be prepared, and deliver to Buyer at Seller's
expense a special purpose statement of assets and liabilities of
the Business dated as of the Closing Date (the "Preliminary Closing
Statement of Assets and Liabilities") audited by Xxxxxx Xxxxxxxx
LLP. The Preliminary Closing Statement of Assets and Liabilities,
after giving effect to the transactions contemplated by this
Agreement, shall be prepared on a basis consistent with the special
purpose statement of assets and liabilities of the Business as of
December 31, 1997 delivered by Seller to Buyer and attached as
Exhibit A hereto (the "Initial Statement of Assets and
Liabilities"), subject to the exceptions and such other matters as
are set forth in Schedule 1.3(a) hereto, and shall disclose net
book value as determined without giving effect to receivables ("Net
Book Value") as of the Closing Date. Seller and its employees and
advisors shall have full access upon reasonable notice and during
normal business hours to the books, papers and records of Buyer and
its subsidiaries (including the Subsidiaries) relating to the
Business as necessary or helpful for the preparation of the
Preliminary Closing Statement of Assets and Liabilities.
(b) Review of Preliminary Closing Statement of Assets
and Liabilities. Buyer, upon receipt of the Preliminary Closing
Statement of Assets and Liabilities, shall (i) review the
Preliminary Closing Statement of Assets and Liabilities and (ii) to
the extent Buyer may deem necessary, make reasonable inquiry of
Seller relating to the preparation of the Preliminary Closing
Statement of Assets and Liabilities. Buyer and its employees and
advisors shall have full access upon prior written notice and
during normal business hours to the books, papers and records of
Seller and its subsidiaries and, upon the delivery by the Buyer of
a customary release, the work papers of Seller's auditors relating
to the preparation of the Preliminary Closing Statement of Assets
and Liabilities in connection with such inquiry. The Preliminary
Closing Statement of Assets and Liabilities shall be binding and
conclusive upon, and deemed accepted by, Buyer unless Buyer shall
have notified Seller in writing of any objections thereto (the
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"Buyer's Objection") within 45 days after receipt of the
Preliminary Closing Statement of Assets and Liabilities.
(c) Disputes. In the event of a Buyer's Objection,
Seller shall have 45 days to review and respond to the Buyer's
Objection, and Seller and Buyer shall attempt to resolve the
differences underlying the Buyer's Objection within 45 days
following completion of Seller's review of the Buyer's Objection.
Disputes between Buyer and Seller which cannot be resolved by them
within such 45-day period shall be referred no later than such 45th
day for decision to a nationally-recognized independent public
accounting firm as Seller and Buyer shall mutually agree upon
(which firm shall not be the independent public accountants for
either Seller or Buyer) (the "Auditor") who shall act as arbitrator
and determine, based solely on presentations by Seller and Buyer
and on the basis of the standards set forth in Section 1.3(a)
hereof and only with respect to the remaining differences so
submitted, whether and to what extent, if any, the Preliminary
Closing Statement of Assets and Liabilities requires adjustment.
The Auditor shall deliver its written determination, including,
without limitation, as to the adjustments, if any, to the
Preliminary Closing Statement of Assets and Liabilities and the
calculations supporting any adjustments, to Buyer and Seller no
later than the 30th day after the remaining differences underlying
the Buyer's Objection are referred to the Auditor, or such longer
period of time as the Auditor determines is necessary. The
Auditor's determination shall be conclusive and binding upon the
parties. The fees and disbursements of the Auditor shall be
allocated between Buyer and Seller in such a way that Seller shall
be responsible for that portion of the fees and expenses equal to
such fees and expenses multiplied by a fraction the numerator of
which is the aggregate dollar value of disputed items submitted to
the Auditor that are resolved against Seller (as finally determined
by the Auditor) and the denominator of which is the total dollar
value of the disputed items so submitted, and Buyer shall be
responsible for the remainder of such fees and expenses. Buyer and
Seller shall make readily available to the Auditor all relevant
information, books and records and any work papers relating to the
Preliminary Closing Statement of Assets and Liabilities and all
other items reasonably requested by the Auditor. In no event may
the Auditor's resolution of any difference be for an amount which
is outside the range of Buyer's and Seller's disagreement.
(d) Final Statement of Assets and Liabilities. The
Preliminary Closing Statement of Assets and Liabilities (after
giving effect to any adjustment pursuant to Section 1.3(c)) shall
become final and binding upon the parties upon the earliest of (i)
the failure by Buyer to object thereto within the period permitted
under Section 1.3(b), (ii) the agreement between Buyer and Seller
with respect to the full resolution of the Buyer's Objection and
(iii) the decision by the Auditor with respect to any disputes
under Section 1.3(c). The Preliminary Closing Statement of Assets
and Liabilities, as adjusted pursuant to the agreement of the
parties or decision of the Auditor, when final and binding is
referred to herein as the "Final Statement of Assets and
Liabilities."
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(e) Adjustments to the Purchase Price. As soon as
practicable (but not more than five business days) after the date
on which the Final Statement of Assets and Liabilities shall have
been determined in accordance with this Section 1.3, (A) Buyer
shall pay to Seller in immediately available funds in U.S. dollars
the amount, if any, by which the sum of (i) Net Book Value (as
determined without giving effect to receivables) as at the Closing
Date as reflected in the Final Statement of Assets and Liabilities
and (ii) the Net Subsidiary Receivables Amount is greater than
$51,775,194, which shall constitute an immediate upward adjustment
of the Purchase Price in such amount or (B) Seller shall pay to
Buyer in immediately available funds in U.S. dollars the amount, if
any, by which $51,775,194 is greater than the sum of the Net
Subsidiary Receivables Amount and Net Book Value (as determined
without giving effect to receivables) as at the Closing Date as
reflected in the Final Statement of Assets and Liabilities, which
shall constitute an immediate downward adjustment of the Purchase
Price in such amount. "Net Subsidiary Receivables Amount" shall be
equal to 95% of the net book value ("net" meaning after deduction
of the amount of the reserves for doubtful accounts) of the trade
accounts receivable of the Subsidiaries as reflected on the Final
Statement of Assets and Liabilities. If either party is required to
make a payment pursuant to this Section 1.3(e), such party shall
also be required to pay interest on the amount of such payment (for
the period commencing as of the Closing Date and ending on the date
on which the payment is made by such party) at a floating rate of
interest equal to the ninety (90) day commercial paper rate for
high grade unsecured notes as published from time to time in The
Wall Street Journal, Eastern Edition. Notwithstanding the
foregoing provisions of this Section 1.3(e), no payment pursuant to
this Section 1.3(e) shall be made unless the payment would exceed
$100,000, and if the payment would exceed $100,000 then the full
amount of the payment contemplated by this Section 1.3(e) shall be
made.
ARTICLE II
CLOSING
2.1 Time and Place. Unless this Agreement shall have
been terminated and the transactions herein contemplated shall have
been abandoned pursuant to Section 9.1 hereof, the closing with
respect to the purchase and sale of the Stock and the Assets (the
"Closing") shall take place at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m.
on the last day of the month during which all of the conditions to
the Closing set forth in Article V hereof are satisfied or waived
(other than the conditions to be satisfied on the Closing Date, but
subject to waiver or satisfaction of such conditions) or on the
next business day in The City of New York if such day is not a
business day in The City of New York) or such other place, time and
date as the parties may agree. The actual date of the Closing is
herein referred to as the "Closing Date". For all purposes, the
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Closing shall be deemed to have occurred on, and the effective time
of Closing shall be deemed to be, 11:59 p.m. New York City time on
the Closing Date.
2.2 Deliveries by Seller. (a) Deliveries on the
Closing Date. On the Closing Date and at the place specified in
Section 2.1, upon the terms and subject to the conditions of this
Agreement, Seller shall, and shall cause its subsidiaries, as
applicable to, deliver to Buyer or its Designees, as applicable:
(i) certificates representing the stock of CorMedica
owned by Seller, certificates representing the stock of Bard
Japan, certificates representing the shares of Bard Ireland
and Bard Galway owned by Xxxx Xxxxxxx, reasonable evidence
that the shareholders' register of Milu validly records the
share transfer of all of the share capital of Milu owned by
Xxxx Xxxxxxx from Xxxx Xxxxxxx to Buyer or its Designees (but
only if third party consents required in connection with the
sale of the share capital of Milu are obtained) and
certificates representing the quotas of X-trode owned by Xxxx
Xxxxxxx (but only if third party the consents required in
connection with the sale of the quotas of X-trode are
obtained), in each case duly endorsed, or accompanied by stock
powers duly executed, with all necessary stock transfer stamps
attached thereto and cancelled or stock transfer forms duly
executed, as the case may be;
(ii) deeds duly executed and acknowledged in recordable
form sufficient to convey to Buyer or its Designees fee simple
title (subject to the Permitted Exceptions) in the Real
Property and the Facilities;
(iii) such deeds, bills of sale and other instruments of
transfer, conveyance and assignment, duly executed and in
valid form, as shall be sufficient to transfer the Stock,
Assets and Assumed Liabilities to Buyer and its Designees;
(iv) the certificates, consents and other documents
referred to herein as deliverable by Seller or its
subsidiaries at the Closing, including, without limitation, an
affidavit of nonforeign status as required by Section
1445(b)(2) of the Foreign Investment and Real Property Tax
Act, as amended;
(v) a receipt for the Purchase Price; and
(vi) such instruments as shall be necessary, in form
reasonably satisfactory to Buyer, duly executed and in valid
form effective to evidence the assumption by Seller or its
Designees, as applicable, of Liabilities pursuant to Section
4.18.
(b) Delivery on or After the Closing Date. On or as
promptly as practicable following the Closing Date, Seller shall,
and shall cause its subsidiaries to, take such action as shall be
necessary to put Buyer and/or its Designees in the possession or
control of the Assets and shall deliver to Buyer copies of all
written agreements, arrangements, commitments, contracts, purchase
orders, leases, permits, business records and other documentation
referenced in Section 1.1(b) hereof.
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2.3 Deliveries by Buyer. On the Closing Date, upon the
terms and subject to the conditions of this Agreement, Buyer and
its Designees shall deliver to, or to the order of, Seller:
(i) the Purchase Price;
(ii) such instruments as shall be necessary, in form
reasonably satisfactory to Seller, duly executed and in valid
form effective to evidence the assumption by Buyer or its
Designees, as applicable, of the Assumed Liabilities; and
(iii) the certificates, consents and other documents
referred to herein as deliverable by Buyer at the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller. Seller
represents and warrants to Buyer as follows:
(a) Due Incorporation of the Subsidiaries. Each of the
Subsidiaries is a corporation duly incorporated, validly existing
and in good standing to the extent that the concepts of due
incorporation, valid existence and good standing exist in the
relevant jurisdiction, under the laws of the jurisdiction of its
incorporation and is qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the
nature of its business or properties makes such qualification
necessary. Each of the Subsidiaries has all requisite corporate
power and authority to own its properties and assets and to carry
on its business as it is now being conducted. Complete and correct
copies of each of the Subsidiaries' respective constituent
documents, each as amended to date, have been made available to
Buyer.
(b) Due Incorporation and Power. Seller is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of New Jersey and has all
requisite corporate power and authority to enter into this
Agreement and the Ancillary Agreements (and together with this
Agreement, the "Transaction Agreements") to which it is a party,
perform its obligations hereunder and thereunder and own, operate
and lease its properties and assets constituting the Business and
to carry on the Business as it is now being conducted. Complete
and correct copies of Seller's Certificate of Incorporation and
By-laws, each as amended to date, have been made available to
Buyer. Each of Xxxx Xxxxxxx and Xxxx International and any
subsidiary of Seller (other than the Subsidiaries) that will be
conveying Assets to Buyer pursuant to Section 1.1 or assuming
Liabilities pursuant to Section 4.18 is, or on the Closing Date
will be, a corporation duly incorporated, validly existing and in
good standing to the extent that the concepts of due incorporation,
valid existence and good standing exist in the relevant
jurisdiction, under the laws of the jurisdiction of its
incorporation and has, or on the Closing Date will have, all
requisite corporate power and authority to consummate the
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applicable transactions contemplated by the Transaction Agreements.
Complete and correct copies of each of Xxxx Xxxxxxx'x and Bard
International's respective constituent documents, each as amended
to date, have been, or will upon request be, made available to
Buyer.
(c) Authorization and Validity of Agreements. The
execution, delivery and performance by Seller of this Agreement and
the consummation by it of the transactions contemplated hereby have
been duly authorized by its Board of Directors. On or prior to the
Closing Date, the execution, delivery and performance by Seller and
each subsidiary of Seller of the Ancillary Agreements to which it
is a party and the consummation by it of the applicable
transactions contemplated thereby will be duly authorized by its
respective Board of Directors, and no other corporate action on its
part or on the part of its stockholders will be necessary for the
execution, delivery and performance by it of the Transaction
Agreements to which it is a party and the consummation by it of the
applicable transactions contemplated hereby and thereby. This
Agreement has been, and at the Closing each of the Ancillary
Agreements will be, duly executed and delivered by Seller and its
subsidiaries, as applicable, and this Agreement is, and at the
Closing each of the Ancillary Agreements will be, a legal, valid
and binding obligation of Seller and its subsidiaries, as
applicable, enforceable against each of Seller and its
subsidiaries, as the case may be, in accordance with their
respective terms, except as enforceability is subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Title. Upon consummation of the transactions
contemplated hereby at the Closing, Seller shall deliver or shall
cause to be delivered to Buyer or a Designee (or, in the case of
qualifying stock required by law, to such persons as Buyer may
designate), as applicable, (i) the Stock and (ii) the Assets, in
the case of each of clauses (i) and (ii), free and clear of any
liens, pledges, claims, mortgages, title defects, charges,
easements, security interests, restrictions, options or other legal
or equitable encumbrances ("Liens") and without Buyer or a Designee
incurring any material penalty or other material adverse
consequences, including, without limitation, any material increase
in rents, royalties or license or other fees imposed solely as a
result of, or arising solely from, the consummation of the
transactions contemplated by the Transaction Agreements, except as
permitted or disclosed in or pursuant to this Article III or in
Schedule 3.1(d).
(e) Capitalization. Except as set forth in
Schedule 3.1(e) hereto, all of the outstanding shares of capital
stock or other equity interests of each of the Subsidiaries have
been validly issued, have been fully paid, are nonassessable (to
the extent such concepts exist in the relevant jurisdiction) and
are owned by Seller and/or one or more of its subsidiaries (other
than shares held by nominees) free and clear of all Liens and
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preemptive rights (other than restrictions on transfer generally
arising under any applicable securities laws). Schedule 3.1(e)
sets forth for each of the Subsidiaries all of the authorized
capital stock or other equity interests, the number of shares of
outstanding capital stock or other equity interests, the record
number of shares of such outstanding capital stock or other equity
interests owned by each owner thereof and the name of each such
record owner. Except as set forth in Schedule 3.1(e) hereto and
except as contemplated by Section 1.1 of this Agreement, there are
no outstanding or authorized rights or agreements of any kind
relating to the sale, issuance, redemption, return or voting of any
shares of capital stock of, or other ownership interests in, any of
the Subsidiaries, or evidencing the right to purchase any shares of
capital stock of, or other ownership interests in, any of the
Subsidiaries and no equity securities of any of the Subsidiaries
are reserved for issuance for any purpose. Except as set forth on
Schedule 3.1(e), there are also no "phantom" stock rights, stock
appreciation rights or other similar rights relating to the capital
stock of, or other ownership interests in, any of the Subsidiaries.
On the date of this Agreement, Seller owns 27,122 shares of Class
A Common Stock of CorMedica.
(f) No Conflict. Except as set forth in Schedule 3.1(f)
hereto, the execution, delivery and performance by Seller and its
subsidiaries of the Transaction Agreements to which they are a
party and the consummation by Seller and its subsidiaries of the
transactions contemplated hereby and thereby does not and will not
(i) violate or result in the breach of any provision of federal,
state, local or foreign law, rule, regulation, order, injunction,
judgment or decree applicable to Seller or any of its subsidiaries
or to which their respective properties are subject; (ii) require
any consent or approval of, or filing with or notice to, any
governmental or regulatory authority under any provision of
federal, state, local or foreign law, rule, regulation, order,
judgment or decree applicable to Seller or any of its subsidiaries;
(iii) violate any provision of the Certificate of Incorporation or
By-laws or other constituent documents of Seller or any of its
subsidiaries; (iv) require any consent, approval or notice under,
conflict with, or result in the breach, lapse, cancellation or
termination of, or constitute a default under, or result in the
acceleration (whether after the filing of notice or the lapse of
time or both) of any right or obligation of, or the performance by,
Seller or any of its subsidiaries under, or result in a loss of any
benefit to which Seller or any of its subsidiaries is entitled or
result in any penalty or adverse consequence under, any Business
Contract or any plan, permit, authorization or approval which is an
Asset or which is owned or used by a Subsidiary or under which a
Subsidiary has any right or obligation or (v) result in the
creation or imposition of any Lien on any of the Assets or the
Stock or on any assets of the Subsidiaries (except in the case of
clauses (i), (ii), (iv) or (v), for such violations, consents,
approvals, filings, notices, conflicts, breaches, lapses,
cancellations, terminations, defaults, accelerations or losses, the
absence of which or the result of which, as the case may be, would
not have a Material Adverse Effect).
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(g) Financial Statements; Financial Results. Seller
heretofore has delivered to Buyer the Initial Statement of Assets
and Liabilities. Except as set forth in Schedule 3.1(g) hereto,
the Initial Statement of Assets and Liabilities was prepared on a
basis consistent with the audited consolidated financial statements
of Seller as of December 31, 1997 (which audited financial
statements were prepared in accordance with GAAP) and presents
fairly in all material respects the financial position of the
Business as of the date thereof. Except (A) as reflected in the
Initial Statement of Assets and Liabilities, (B) for Seller's or
its subsidiaries', as the case may be, obligations under the
Business Contracts or under other contracts or agreements disclosed
in the Schedules hereto, to the extent that the existence of such
obligations is ascertainable solely by reference to such Business
Contracts or such other contracts or agreements, (C) for
liabilities incurred in the ordinary course of business subsequent
to December 31, 1997 or in accordance with Section 4.2 and, in each
case, which will be reflected on the Final Statement of Assets and
Liabilities and (D) for liabilities of Seller not assumed by Buyer
or its Designees under this Agreement, neither the Business nor
Seller (but only with respect to the Business) nor any Subsidiary
has any material Liabilities. The Liability of Buyer and its
Designees for the Assumed Liabilities to be assumed pursuant to
Section 1.1(d)(ii) and the Liabilities of the Subsidiaries
reflected in the Final Statement of Assets and Liabilities (to the
extent required to be reflected as liabilities on a balance sheet
prepared in accordance with GAAP) in the aggregate will not exceed
the aggregate amount of the liabilities reflected in the
liabilities column of the Final Statement of Assets and
Liabilities, except for up to $300,000 for accrued vacation and
sick time.
(h) Absence of Material Adverse Change. Except as
disclosed in Schedule 3.1(h), since January 1, 1998, (i) the
Business has been conducted in the ordinary course of business
consistent with past practice and (ii) there has not been any
material adverse change in (A) the business, financial condition or
results of operations of the Business, or (B) the Assets or any of
the Subsidiaries, except (I) as may be disclosed in this Agreement
or in the Schedules hereto, and (II) personnel changes resulting
from the proposed change of ownership (it being understood and
agreed that Buyer assumes the risks associated with such personnel
changes).
(i) Taxes. (i) Except as set forth in Schedule 3.1(i),
there has been timely filed by or on behalf of each Subsidiary
and with respect to the Business all material returns,
declarations, statements, reports, schedules, forms and
information returns and any amended tax returns relating to
any federal, state, provincial, local, municipal, territorial
and foreign income, profits, franchise, gross receipts,
municipal license, payroll, sales, employment, use, real and
personal property, real estate, excise, value added,
estimated, stamp, alternative or add-on minimum,
environmental, withholding and any other taxes, duties or
assessments, together with all interest, penalties and
-16-
additions imposed with respect to such amounts (collectively,
"Taxes") required to have been filed (the "Tax Returns"), and
all Taxes shown as due on such Tax Returns, have been or will
be paid in a timely fashion or will be adequately provided for
in the Final Statement of Assets and Liabilities on a basis
consistent with the audited consolidated financial statements
of Seller as of December 31, 1997, and all such Tax Returns
are true, complete and correct in all material respects.
(ii) Except as disclosed in Schedule 3.1(i), no audit or
other proceeding by any court, governmental or regulatory
authority or similar person is pending with respect to any
Taxes due from or with respect to any Subsidiary. No written
assessment of Tax is proposed against any Subsidiary, except
to the extent that any such written assessment is being
contested in good faith.
(iii) There are no Liens for Taxes on any Asset or any
asset of any Subsidiary, other than with respect to Taxes not
yet due and payable or which are being contested in good
faith.
(iv) Except as set forth in Schedule 3.1(i) hereto, none
of the Subsidiaries will be, as of the Closing Date, a party
to or bound by any tax indemnity, tax sharing or tax
allocation agreement.
(v) The amount of the Subsidiaries' liability for unpaid
Taxes for all periods ending on or before the date of the
Initial Statement of Assets and Liabilities does not, in the
aggregate, exceed the amount of liability accruals reflected
on the Initial Statement of Assets and Liabilities, and the
amount of the Subsidiaries' liability for unpaid Taxes for all
periods ending on or before the Closing Date shall not, in the
aggregate, exceed the amount of liability accruals for Taxes
reflected on the Final Statement of Assets and Liabilities.
(vi) The Seller and its subsidiaries have withheld and
paid in connection with the operation of the Business all
material Taxes required to be withheld and paid with respect
to any employee, creditor, independent contractor or other
third party for all periods for which the applicable statute
of limitations has not expired.
(j) Title to Real and Personal Properties; Liens and
Encumbrances; Assets; No Other Interests. (i) Except as set
forth in Schedule 3.1(j)(i), on the Closing Date, (A) Seller
or the applicable subsidiary of Seller (other than the
Subsidiaries) will own and have good and valid title to the
assets of Seller and its subsidiaries (other than the
Subsidiaries) in which Seller's and its subsidiaries' right,
title and interest are being transferred pursuant to Section
1.1 and which are reflected on the books and records of Seller
and its subsidiaries (other than the Subsidiaries) as being
owned by Seller or a subsidiary (other than the Subsidiaries)
and (B) one of the Subsidiaries will own and have good and
valid title to the real and tangible personal properties
reflected on the Final Statement of Assets and Liabilities
(other than real and tangible personal properties that are
identified in clause (A) above) and the other assets reflected
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on the books and records of such Subsidiary as being owned by
such Subsidiary on the Closing Date, in the case of clauses
(A) and (B), free and clear of all Liens, except (v) statutory
Liens arising or incurred in the ordinary course of business
with respect to which the underlying obligations are not
delinquent, (w) Liens for Taxes the amount or validity of
which are being contested in good faith or which are not yet
delinquent, (x) Liens securing liabilities that are reflected
on the Initial Statement of Assets and Liabilities and which
will be reflected on the Final Statement of Assets and
Liabilities, (y) Liens which do not materially impair the
continued use and operation of such properties in the manner
in which they have heretofore been used by Seller and its
subsidiaries and (z), with respect to Real Property or real
property owned by the Subsidiaries, immaterial survey
exceptions and consents and customary exceptions to title
which do not materially impair the continued use and operation
of such real property in the manner in which it has heretofore
been used by Seller and its subsidiaries (the "Permitted
Exceptions").
(ii) Except as set forth in Schedule 3.1(j)(ii), the
Assets, the rights and assets of the Subsidiaries immediately
after the Closing and the rights of Buyer under the
Transaction Agreements, considered as a whole, constitute all
the properties, assets and rights necessary for Buyer and its
affiliates to conduct the Business in all material respects as
conducted on the date hereof (with such changes in the conduct
of the Business as are permitted by Section 4.2).
(iii) All material items of equipment and other tangible
assets which are Assets or are being leased to Seller or any
of its subsidiaries under leases which are Assets or which are
owned by or leased to a Subsidiary are adequate for the uses
to which they are being put and are adequate for the conduct
of the Business in the manner in which the Business is
conducted on the date hereof (with such changes in the conduct
of the Business as are permitted by Section 4.2).
(k) Business Contracts. Schedule 3.1(k) hereto sets
forth (i) each Material Contract to which any of the Subsidiaries
is a party or by which any of them or their assets are bound or
have any rights (the "Material Subsidiary Contracts") and (ii) each
Material Contract which constitutes an Asset (together with the
Material Subsidiary Contracts, the "Business Contracts"). For the
purpose of this Agreement "Material Contract" shall mean any
agreement, contract, maintenance and service agreement, purchase
order, purchase commitment for raw materials, goods and other
services, advertising and promotional agreement, lease, sublease,
license, sublicense, option (other than employee stock options),
shipping agreement, employment agreement or collective bargaining
agreement which by its terms (i) after the date hereof, requires or
may require any party thereto to pay an amount or provide
consideration of any nature (whether in a lump sum or in a series
of installments) or provides for financial commitments or, in any
case, has an aggregate potential future liability, in excess of
$100,000 in amount or value, (ii) provides for a surety, cosigner,
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endorser, guaranty or indemnity by any Subsidiary of any obligation
or liability in excess of $100,000, contingent or otherwise, or
(iii) has a remaining stated term in excess of one year and may not
be terminated by any party thereto upon less than three months'
notice, other than maintenance and service agreements and leases
for personal property entered into in the ordinary course of
business. None of Seller or any of its subsidiaries is, or since
January 1, 1995 has been, in breach of or default in the
performance of its obligations under any Business Contract, and, to
the knowledge of Seller, no breach or default, alleged breach or
default, or event which would (with the passage of time, notice or
both) constitute a breach or default thereunder by Seller or any of
its subsidiaries (or, to the knowledge of Seller, any other party
or obligor with respect thereto) has occurred, or as a result of
its performance will occur. To the knowledge of Seller, each
Business Contract is in full force and effect. Complete and
correct copies of each Business Contract, including, without
limitation, all amendments and supplements thereto, have been made
available to Buyer.
(l) Legal Proceedings. Except as identified in Schedule
3.1(l) hereto, there is no material civil, criminal or
administrative claim, action, proceeding, arbitration or
governmental investigation (each, a "Legal Proceeding") pending or,
to the knowledge of Seller, threatened in any jurisdiction, in each
case, which (i) seeks to restrain or enjoin the consummation of the
transactions contemplated by this Agreement or (ii) involves the
Business, any Subsidiary or any of the Assets. Schedule 3.1(l)
hereto sets forth each judgment, judicial decree, injunction,
determination, award and order entered by any domestic or foreign
court or governmental authority or arbitrator or arbitral body to
which the Business, any of the Subsidiaries, the Stock or any of
the Assets is subject. None of any Subsidiary, the Seller (but
only with respect to the Business) or any of its subsidiaries other
than the Subsidiaries (but only with respect to the Business) is,
or since January 1, 1995 has been, in violation or non-compliance
in any material respect with any such judgment, judicial decree,
injunction, determination, award or order.
(m) Government Licenses, Permits and Related Approvals.
Schedule 3.1(m) hereto lists each material license, permit,
consent, certification, exemption, approval, authorization,
qualification, order and franchise issued by any federal, state,
local or foreign governmental or regulatory authority or
organization used by Seller and its subsidiaries to conduct the
Business as presently conducted (the "Material Permits"). Except
as set forth in Schedule 3.1(m) and, to the knowledge of Seller,
each item listed in Schedule 3.1(m) that constitutes an Asset or is
owned or used by a Subsidiary is valid and in full force and
effect, and neither Seller nor any of its subsidiaries has received
any notice from any governmental authority cancelling, rescinding,
materially modifying or refusing to renew any such item that
constitutes an Asset or is owned or used by a Subsidiary.
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(n) Conduct of Business in Compliance with Regulatory
Requirements. (i) Seller and each of its subsidiaries (other than
the Subsidiaries) is, and, at all times since January 1, 1995 has
been, in compliance with each law, regulation, rule, ordinance,
order, judgment, decree and code promulgated or rendered by any
federal, state, local or foreign governmental or regulatory
authority or organization (each, a "Law") applicable to the
operation or conduct of, or ownership of the property relating to,
the Business except to the extent that failure to comply therewith
would not have a Material Adverse Effect. Each of the Subsidiaries
is, and, at all times since January 1, 1995, has been, in
compliance with each Law applicable to such Subsidiary except to
the extent that failure to comply therewith would not have a
Material Adverse Effect. Except as set forth in Schedule 3.1(n),
since January 1, 1995, neither Seller nor any of its subsidiaries
(other than the Subsidiaries), in each case with respect to the
Business, nor any of the Subsidiaries has been required by any
governmental agency to make, nor has voluntarily undertaken, any
product recall nor has Seller or any of its subsidiaries (other
than the Subsidiaries) been restrained in the research,
development, manufacture, production, marketing, advertising,
distribution, licensing, use, offer for sale or sale of any
products of the Business, nor has any Subsidiary been restrained in
the research, development, manufacture, production, marketing,
advertising, distribution, licensing, use, offer for sale or sale
of any products and, to the knowledge of Seller, there is no such
action or proceeding threatened by the U.S. Food and Drug
Administration or any other U.S. or foreign governmental body or
multinational organization or union against Seller or any of its
subsidiaries (other than the Subsidiaries) relating to any products
of the Business or against any Subsidiary, other than regulatory
actions and proceedings affecting the medical device industry
generally.
(o) Labor Matters. Except as set forth in
Schedule 3.1(o) hereto: (i) neither Seller nor any of its
subsidiaries is a party or subject, and no employment agreements or
other agreements affecting Transferred Employees are subject, and
no Transferred Employees are subject to any collective bargaining
agreement or other collective contract or agreement with any labor
organization or other representative of any of the Transferred
Employees, nor is any such collective contract or agreement
presently being negotiated nor is there any duty on the part of
Seller or any of its subsidiaries to bargain with any labor
organization or representative for any such collective contract or
agreement; (ii) there is no unfair labor practice charge or
complaint pending or, to the knowledge of Seller, threatened
against or otherwise affecting any of the Subsidiaries or relating
to any of the Transferred Employees; (iii) there is no labor
strike, slowdown, work stoppage, lockout or other labor controversy
in effect or, to the knowledge of Seller, threatened against any of
the Subsidiaries or relating to any of the Transferred Employees;
(iv) no action, suit, complaint, charge, arbitration, inquiry,
proceeding or investigation by or before any court, governmental
agency, administrative agency, commission, arbitrator or arbitral
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body brought by or on behalf of any present or former employee or
retiree of any of the Subsidiaries or any Transferred Employee is
pending or, to the knowledge of Seller, threatened against Seller
or any of the Subsidiaries; (v) Seller (with respect to the
Business) and the Subsidiaries are in compliance with their
obligations pursuant to the Worker Adjustment and Retraining
Notification Act of 1988 ("WARN"), and all other notification,
bargaining and other similar obligations, including, without
limitation, those arising under or in relation to any collective
bargaining agreement, federal, state, local or foreign law or
otherwise; and (vi) to the knowledge of Seller, each employee of
the Business with access to information the unauthorized use or
disclosure of which would have a Material Adverse Effect is subject
to a confidentiality agreement or other obligation of
confidentiality with respect to such information.
(p) Intellectual Property. (i) To the knowledge of
Seller and except as set forth in Schedule 3.1(p)(i):
(A) Seller or one of its subsidiaries owns, controls or
licenses the material patent rights described in Schedule
1.1(b)(ix) (the "Asset Patent Rights") and the material patent
rights of the Subsidiaries described in Schedule 3.1(p)(i)
(together with the Asset Patent Rights, the "Patent Rights")
free and clear of all Liens; (B) no third party has alleged
any claims challenging the validity or ownership of the Patent
Rights or Seller's or its subsidiaries' right to use the
Patent Rights; (C) the issued patents under such Patent Rights
are valid and subsisting and none of the claims of said
patents is now being infringed by others; and (D) no third
party has notified Seller or any of its subsidiaries that
Seller or one of its subsidiaries (other than the
Subsidiaries) is infringing any U.S. or foreign patent owned
by such third party in the current operation of the Business
or that any Subsidiary is infringing any U.S. or foreign
patent owned by such third party, and no claim is now pending
or threatened to such effect;
(ii) To Seller's knowledge and except as set forth in
Schedule 3.1(p)(ii): (A) Seller or one of its subsidiaries
owns the material trademark rights described in Schedule
1.1(b)(x) (the "Asset Trademark Rights") and the material
trademark rights of the Subsidiaries described in Schedule
3.1(p)(ii) (together with the Asset Trademark Rights, the
"Trademark Rights") free and clear of all Liens, (B) all such
Trademark Rights are valid and subsisting, free and clear of
any encumbrances or rights of third parties which would
restrict Buyer's exclusive right to use the Trademark Rights
and (C) no claim by any third party with regard to the use of
any of the Trademark Rights is pending or has been made or
threatened and none of the Trademark Rights is being infringed
by others;
(iii) To Seller's knowledge and except as disclosed in
Schedule 3.1(p)(iii) (A) Seller or one of its subsidiaries
owns the material copyrights described in Schedule 1.1(b)(xi)
("the Asset Copyright Rights") and the material copyrights of
the Subsidiaries described in Schedule 3.1(p)(iii) (together
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with the Asset Copyright Rights, the "Copyright Rights") free
and clear of all Liens, (B) all such Copyright Rights are
valid and subsisting, free and clear of any encumbrances on
rights of third parties which would restrict Buyer's exclusive
rights to use the Copyright Rights, and (C) there are no
pending or threatened claims by or against Seller or its
subsidiaries with respect to Copyright Rights or the use
thereof and no valid basis exists for any such claim;
(iv) To Seller's knowledge, Seller and its subsidiaries
have taken all practicable measures and precautions to protect
and maintain the confidentiality and secrecy of all Business
Intellectual Property in a manner consistent with Seller's
policy and practice except Business Intellectual Property
whose value would be unimpaired by public disclosure and
otherwise to maintain and protect the value of all Business
Intellectual Property;
(v) To Seller's knowledge, any Business Intellectual
Property held by assignment has been duly recorded with the
governmental authority from which the original registration
issued or before which the application for registration is
pending, except where the failure to be duly recorded would
not have a Material Adverse Effect, and the registered user
provisions of all nations requiring such registration with
respect to the Business Intellectual Property have been
complied with; and
(vi) Except as disclosed in Schedule 3.1(p)(vi), all
rights of Seller and its subsidiaries with respect to each
item of the Business Intellectual Property are transferable to
Buyer as herein contemplated.
"Business Intellectual Property" means the Patent Rights,
the Trademark Rights, the Copyright Rights, the material
Technology identified in Section 1.1(b)(xii), the material
Trade Dress identified in Section 1.1(b)(xiii) and in the case
of the material Technology and material Trade Dress referred
to above, the similar material rights of the Subsidiaries.
(q) Employee Benefit Plans. (i) Schedule 3.1(q)(i)
hereto contains a true and complete list of each employee
benefit plan (within the meaning of Section 3(3), of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA")), whether oral or written, and each other plan,
agreement, program, policy, practice or arrangement, whether
oral or written, providing employee benefits or compensation
(including, without limitation, any stock purchase, stock
option, fringe benefit, bonus or incentive, deferred
compensation, retirement, pension, annuity, death, assurance,
insurance, employment, collective bargaining, severance or
change of control agreements, plans, programs, policies or
arrangements) under which any employee or former employee of
the Business (including, without limitation, employees who are
not employed in or paid from the United States ("Non-United
States Employees")) has any present or future right to
benefits or compensation for which Buyer, any of the
Subsidiaries or any affiliates of Buyer will have liability
after the Closing Date; excluding, however, any plans,
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programs, policies and arrangements which exist to provide
benefits mandated by law. All such plans, agreements,
programs, polices and arrangements shall be collectively
referred to as the "Benefit Plans."
(ii) With respect to each Benefit Plan, Seller has made
available to Buyer a current, accurate and complete copy and,
to the extent applicable, (A) any related trust agreement,
annuity contract, policy of insurance or other funding
instrument; (B) any summary plan description; (C) with respect
to Benefit Plans providing pension benefits from which assets
will be transferred to a plan of Buyer, the most recently
filed Form 5500 and attached schedules, if any, and (D) the
most recently prepared actuarial report and financial
statements, if any. Seller has made available to Buyer a
current, accurate and complete copy of the Seller Severance
Plan. Except as set forth in Schedule 3.1(q)(ii), neither
Seller nor any subsidiary has a commitment to modify or
terminate any Benefit Plan which provides benefits or
compensation to any Transferred Employees or to establish a
new Benefit Plan to provide benefits or compensation to any
Transferred Employee, except as required by applicable law.
(iii) Each Benefit Plan has been established and
administered in accordance with its terms and is in compliance
with applicable Law, including, without limitation, to the
extent applicable, any foreign Laws, ERISA and the Internal
Revenue Code of 1986, as amended (the "Code").
(iv) Except as set forth in Schedule 3.1(q)(iv), (i) each
Benefit Plan and related trust intended to be tax qualified
under the Code have received a favorable determination from
the United States Internal Revenue Service or will be timely
submitted for such determinations and (ii) each Benefit Plan
intended to qualify for particular tax or other benefits under
applicable foreign Law has received all necessary
determination of such qualification from the appropriate
governmental agency or authority. To Seller's knowledge,
nothing has occurred since any such determination that would
be reasonably likely to adversely affect such qualification.
(v) Except as set forth in Schedule 3.1(q)(v), during
the last 5 years with respect to any Benefit Plan, (i) no
"reportable event" (as such term is used in section 4043 of
ERISA) (other than those events for which the 30 day notice
has been waived pursuant to the regulations) has occurred with
respect thereto, (ii) no "accumulated funding deficiency" (as
such term is used in section 412 or 4971 of the Code) has
occurred, (iii) such Benefit Plan has not been terminated and
(iv) no "prohibited transaction" (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) has occurred
from which a material liability is outstanding or which could
reasonably be expected to result in material liability to
Buyer, where any such reportable event, deficiency,
termination or prohibited transaction has resulted in a
material liability under ERISA.
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(vi) Except as set forth in Schedule 3.1(q)(vi) hereto,
no actions, suits or claims (other than routine claims for
benefits in the ordinary course), whether under federal,
state, local or foreign Laws or otherwise, are pending or, to
the knowledge of Seller, threatened with respect to any
Benefit Plan.
(vii) Except as set forth in Schedule 3.1(q)(vii), no
Benefit Plan exists which could, after the Closing Date,
result in the payment by Buyer to any employee of the Business
of any money or other property or rights or the acceleration
or provision of any other rights or benefits to any such
employee as a result of the consummation of the transactions
contemplated by this Agreement (regardless of whether such
payment is a "parachute payment" within the meaning of
Section 280G of the Code).
(viii) Except as set forth in Schedule 3.1(q)(viii), no
Benefit Plan is a "multiemployer plan" (within the meaning of
Section 3(37) of ERISA) and neither Seller nor any member of
its "controlled group" (such term to include any member of a
controlled group of organizations within the meaning of
Section 414(b), (c), (m), or (o) of the Code) has incurred any
withdrawal liability that (i) remains unsatisfied in a
material amount or (ii) could reasonably be expected to
subject Seller or any member of its controlled group to
material controlled group liability under Section 4001(b) of
ERISA.
(ix) Except as disclosed in Schedule 3.1(q)(ix) hereto,
or as otherwise required by Law or collective bargaining
agreements, no Employer has any Liabilities to current or
former Non-United States Employees arising from early
retirement or pension arrangements (including, without
limitation, any direct pension promise, direct insurance or
through the setting up of a support fund or pension fund).
(x) Except as set forth in Schedule 3.1(q)(x): (i)
neither Seller nor any of its subsidiaries has incurred any
liability for any excise tax arising under Section 4971, 4972,
4980 or 4980B of the Code which will result in a material
Liability to Buyer, and no fact or event exists which could
reasonably be expected to give rise to any such material
Liability to Buyer; (ii) none of the assets of Seller or any
of its subsidiaries is the subject of any Lien arising under
Section 302(f) of ERISA or Section 412(n) of the Code; and
(iii) neither Seller nor any of its subsidiaries has been
required to post any security under Section 307 of ERISA or
Section 401(a)(29) of the Code.
(xi) Except as disclosed in Schedule 3.1(q)(xi): (A) on
the basis of the actuarial methods and assumptions used for
the last actuarial valuation of the Benefit Plans relating to
the provision of pension and/or death benefits in Ireland (the
"Irish Pension Plans"), the assets of each Irish Pension Plan
are and will at the Closing Date be sufficient to fund the
benefits in payment and those prospectively or contingently
payable in respect of pensionable service credited or
completed up to the Closing Date after making allowance on the
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basis provided in the actuarial valuation for projected future
increases in salaries and increases to pensions in payment or
deferment, except where any such insufficiency would not
reasonably be expected to have a Material Adverse Effect; (B)
the Irish Pension Plans and those Benefit Plans relating to
the provision of disability benefits in Ireland (the "Irish
Disability Plans") have at all times been duly administered in
compliance with all applicable Laws and requirements
(including, without limitation, Revenue and trust
requirements), and do not contain any provisions which could
give rise to a claim under Article 119 of the Treaty of Rome
or Part VII of the Pensions Act, 1990 of Ireland, except where
any such failure to comply or inclusion of such provisions,
individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect; and (C) all
contributions and expenses due under the Irish Pension Plans
and Irish Disability Plans with respect to the period up to
the Closing Date have been paid, except where the failure to
pay could not be reasonably expected to have a Material
Adverse Effect.
(r) Brokers, Finders, etc. With the exception of fees,
commissions and expenses which shall be Seller's sole
responsibility, Seller has not employed, nor is it subject to any
valid claim of, any broker, finder, consultant or other
intermediary in connection with the transactions contemplated by
this Agreement who might be entitled to a fee or commission in
connection with such transactions.
(s) Environmental Matters. Except as would not
reasonably be expected to result in material liability under
Environmental Laws or as set forth in Schedule 3.1(s) hereto, with
respect to Seller and its subsidiaries (other than the
Subsidiaries) in connection with the Business and with respect to
the Subsidiaries whether or not in connection with the Business:
(1) each of Seller and its subsidiaries hold, and are in
compliance with, and at all relevant times have held and have
been in compliance with all Environmental Permits and are
otherwise and at all relevant times have been in compliance
with all Environmental Laws;
(2) neither Seller nor any of its subsidiaries has
received any Environmental Claim, and neither Seller nor any
of its subsidiaries is aware of any threatened Environmental
Claim;
(3) neither Seller nor any of its subsidiaries has
entered into or has agreed to, or is subject to, any judgment,
decree, order, or legally binding agreement by or from any
governmental authority under any Environmental Laws, including
without limitation those relating to compliance with
Environmental Laws or to investigation, cleanup, remediation
or removal of Hazardous Materials;
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(4) (i) Hazardous Materials have not been generated,
used, treated, handled or stored on, or transported to or
from, or released at, any of the Facilities or Real Property
or any leased property included in the Assets or any
facilities or real property owned or leased by any of the
Subsidiaries in violation of any Environmental Laws; (ii)
Seller and its subsidiaries have disposed of all wastes,
including, without limitation, those containing Hazardous
Materials, in compliance with all applicable Environmental
Laws and Environmental Permits; and (iii) no Real Property or
leased property included in the Assets, and no facilities or
real property owned or leased by any of the Subsidiaries and,
to the knowledge of Seller, no property adjoining any Real
Property or any leased property included in the Assets or any
facilities or real property owned or leased by any of the
Subsidiaries, is listed or, to the knowledge of Seller,
proposed for listing on the National Priorities List under the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or on any analogous state
list of sites requiring investigation or cleanup; and
(5) none of the Real Property or the Facilities or any
leased facilities included in the Assets or any facilities or
real property owned or leased by any of the Subsidiaries
contains any friable ACMs, PCBs or radon in condition or
concentration that violates Environmental Laws.
For purposes of this Section 3.1(s), the following terms
shall have the following meanings:
"Environmental Claim" means any written notice, claim,
demand, directive, action, suit, complaint, legal or administrative
proceeding or other written communication by or on behalf of any
governmental authority or any other person for damages, injunctive
or equitable relief, personal injury (including, without
limitation, sickness, disease or death), remedial or removal action
costs, property damage, natural resource damages, nuisance,
pollution, any adverse effect on the environment caused by any
Hazardous Material, or for fines, penalties or restrictions, or in
connection with the revocation, cancellation, recision, material
modification or refusal to renew (or threat to effect the same) of
any Environmental Permits, or alleging liability or potential
liability arising out of, relating to, based on or resulting from
(i) the presence, discharge, emission, release or threatened
release of any Hazardous Materials, or (ii) circumstances forming
the basis of any violation or alleged violation of any
Environmental Laws or Environmental Permits.
"Environmental Laws" means all applicable and legally
binding foreign, national, European Union, federal, state,
provincial and local laws, statutes, directives, rules,
regulations, treaties, conventions, codes, ordinances, orders,
judgments and decrees relating to contamination, pollution or
protection of human health (as relating to the environment) or the
environment in each case as in effect as of the date of this
Agreement or on or prior to the Closing Date.
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"Environmental Permits" means all permits,
authorizations, licenses, franchises, certificates, approvals,
consents, registrations, variances, filings and other governmental
authorizations or notifications required or necessary under
Environmental Laws for Seller and its subsidiaries to conduct the
Business or to be held with respect to the Real Property, the
Facilities, any leased facilities included in the Assets or any
facilities or real property owned or leased by any of the
Subsidiaries.
"Hazardous Materials" means all hazardous, dangerous or
toxic substances, wastes, materials or chemicals, petroleum
(including, without limitation, crude oil or any fraction thereof)
and petroleum products, radioactive materials, friable asbestos and
friable asbestos-containing materials, polychlorinated biphenyls,
pollutants, contaminants and all other materials regulated pursuant
to any Environmental Laws.
(t) No Other Representations or Warranties. Except for
the representations and warranties contained in this Agreement,
neither Seller nor any other person makes any other express or
implied representation or warranty on behalf of Seller or its
subsidiaries, including, without limitation, as to the probable
success or profitability of the ownership, use or operation of the
Business and the Assets by Buyer after the Closing.
(u) Affiliate Agreements. Except for the Ancillary
Agreements and except as set forth in Schedule 3.1(v), no agreement
or contract between any of the Subsidiaries and Seller (or any
subsidiary or affiliate of Seller) will continue in effect
subsequent to Closing.
(v) Insurance. All material properties and risks of
Seller and its subsidiaries (other than the Subsidiaries) in
respect of the Business and all material properties and risks of
the Subsidiaries are covered by valid and currently effective
insurance policies or binders of insurance or programs of self-insurance
in such types and amounts as are consistent with
customary practices and standards of companies engaged in
businesses and operations similar to the Business and, with respect
to the Subsidiaries, businesses and operations similar to the
operations of the Subsidiaries, and in such amounts and types as
are adequate and reasonable in view of the loss experience of the
Business and the Subsidiaries, as applicable, the pending claims,
threatened claims known to Seller and occurrences known to Seller
that could lead to claims against the Business or the Subsidiaries.
Seller or one or more of its subsidiaries has paid all premiums due
under such policies and is not in default in any material respect
with respect to its obligations under any such policies.
(w) Audited Financial Statements. The audited financial
statements (including the related notes and supporting schedules,
if any, thereto) delivered to Buyer pursuant to Section 4.16 hereof
will (i) present fairly in all material respects the financial
condition and results of operations and cash flows of the Business
at the dates and for the periods indicated, (ii) be prepared in
accordance with U.S. generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods
involved, and (iii) comply as to form in all material respects with
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the applicable requirements of Regulation S-X of the Securities and
Exchange Commission, except to the extent consistent with any
formal action taken or informal advice rendered to Buyer by the
Securities and Exchange Commission as contemplated by Section 4.16.
(x) Milu and X-trode. Except as set forth in Schedule
3.1(x), as of the Closing Date neither Milu nor X-trode will own or
have rights in any material assets, properties, rights, goodwill,
privileges, claims or contracts of any kind or nature which are
used or useful in the Business.
3.2 Representations and Warranties of Buyer. Buyer
represents and warrants to Seller as follows:
(a) Due Incorporation and Power. Buyer is a corporation
duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power
and authority to enter into this Agreement and the Ancillary
Agreements to which it is a party and perform its obligations
hereunder and thereunder. Each Designee of Buyer is, or on the
Closing Date will be, a corporation duly incorporated, validly
existing and in good standing to the extent that the concepts of
due incorporation, valid existence and good standing exist in the
relevant jurisdiction, under the laws of the jurisdiction of its
incorporation and has, or on the Closing Date will have, all
requisite corporate power and authority to consummate the
applicable transactions contemplated by the Transaction Agreements.
(b) Authorization and Validity of Agreements. The
execution, delivery and performance by Buyer of this Agreement and
the consummation by it of the transactions contemplated hereby have
been duly authorized by its Board of Directors. On or prior to the
Closing Date, the execution, delivery and performance by Buyer and
each subsidiary of Buyer of the Ancillary Agreements to which it is
a party and the consummation by it of the applicable transactions
contemplated thereby will be duly authorized by its respective
Board of Directors, and no other corporate action on its part or on
the part of its stockholders will be necessary for the execution,
delivery and performance by it of the Transaction Agreements to
which it is a party and the consummation by it of the applicable
transactions contemplated hereby and thereby. This Agreement has
been, and at the Closing each of the Ancillary Agreements will be,
duly executed and delivered by Buyer and its subsidiaries, as
applicable, and this Agreement is, and at the Closing each of the
Ancillary Agreements will be, a legal, valid and binding obligation
of Buyer and its subsidiaries, as applicable, enforceable against
each of Buyer and its subsidiaries, as the case may be, in
accordance with their respective terms, except as enforceability is
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing.
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(c) No Conflict. The execution, delivery and
performance by Buyer and its subsidiaries of the Transaction
Agreements to which they are a party and the consummation by Buyer
and its subsidiaries of the transactions contemplated hereby and
thereby does not and will not (i) violate or result in the breach
of any provision of federal, state, local or foreign law, rule,
regulation, order, injunction, judgment or decree applicable to
Buyer or any of its subsidiaries or to which their respective
properties are subject; (ii) except for the antitrust clearances
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (and the rules and regulations promulgated thereunder), any
foreign antitrust or competition regulations and the merger and
competition regulations of the European Community or similar
supranational bodies, require any consent or approval of, or filing
with or notice to, any governmental or regulatory authority under
any provision of federal, state, local or foreign law, rule,
regulation, order, judgment or decree applicable to Buyer or any of
its subsidiaries; (iii) violate any provision of the Certificate of
Incorporation or By-laws or other constituent documents of Buyer or
any of its subsidiaries; or (iv) require any consent, approval or
notice under, and will not conflict with, or result in the breach
by Buyer or any of its subsidiaries of, or constitute a default by
Buyer or any of its subsidiaries under, any indenture, mortgage,
deed of trust, lease, license, franchise, contract, agreement,
concession or other instrument to which Buyer or any of its
subsidiaries is a party or by which any of them, or their assets,
are bound or encumbered (except in the case of clauses (i), (ii) or
(iv), for such violations, consents, approvals, filings, notices,
conflicts, breaches, lapses, cancellations, terminations, defaults,
accelerations or losses, the absence of which or the result of
which, as the case may be, would not have a material adverse effect
on the ability of Buyer or its affiliates to consummate any of the
transactions contemplated hereby).
(d) Brokers, Finders, etc. Except for fees, commissions
and expenses which shall be Buyer's sole responsibility, Buyer has
not employed, nor is it subject to the valid claim of, any broker,
finder, consultant or other intermediary in connection with the
transactions contemplated by this Agreement who might be entitled
to a fee or commission in connection with such transactions.
(e) Legal Proceedings. There is no material Legal
Proceeding pending against Buyer or any of its subsidiaries or, to
the knowledge of Buyer, otherwise pending or threatened in any
jurisdiction which seeks to restrain or enjoin the consummation of
the transactions contemplated by this Agreement.
(f) Purchase for Investment. Buyer is aware that no
shares of capital stock or other securities being acquired pursuant
to the transactions contemplated hereby are registered under the
Securities Act of 1933, as amended (the "Securities Act"), or under
any state or foreign securities laws. Neither Buyer nor any of its
Designees is an underwriter, as such term is defined under the
Securities Act, and Buyer and/or its Designees are purchasing such
shares solely for investment, with no present intention to
distribute any such shares to any person, and neither Buyer nor any
of its Designees will sell or otherwise dispose of such shares
-29-
except in compliance with the registration requirements or
exemption provisions under the Securities Act and the rules and
regulations promulgated thereunder, or any other applicable
securities laws.
(g) No Other Representations or Warranties. Except for
the representations and warranties contained in this Agreement,
neither Buyer nor any other person makes any other express or
implied representation or warranty on behalf of Buyer or its
subsidiaries.
3.3 Survival of Representations and Warranties. Subject
to Section 8.5, the respective representations and warranties of
Seller and Buyer contained in this Article III, the certificate
delivered by Seller pursuant to Section 5.2(c) and the certificate
delivered by Buyer pursuant to Section 5.3(c) at the Closing shall
survive until the date that is eighteen months after the Closing
Date; provided, however, that the representations and warranties
set forth in Sections 3.1(e) and 3.1(s) shall survive until the
third anniversary of the Closing Date.
ARTICLE IV
COVENANTS
4.1 Access to Information Concerning Properties and
Records. (a) Access. During the period commencing on the date
hereof and ending on the Closing Date, and subject to applicable
law, including, without limitation, antitrust laws, Seller shall,
and shall cause its subsidiaries to, afford to Buyer, its counsel,
accountants and other authorized representatives reasonable access
during normal business hours, upon reasonable notice and in such
manner as will not unreasonably interfere with the conduct of their
respective businesses, to the facilities, properties, books,
records, the portions of Tax Returns relating to the Business,
documents, personnel and auditors of the Business, and, upon
request, arrange for Buyer to inspect any relevant land register
relating to real property forming part of the Assets or assets of
a Subsidiary in order that Buyer may have the opportunity to make
such reasonable investigations as it shall desire of the affairs of
the Business. Seller shall, and shall cause its subsidiaries and
their respective officers, employees, accountants and other agents
to cooperate with any such investigation.
(b) Subsequent Access. Following the Closing, Seller
shall provide Buyer and its representatives, and Buyer shall
provide Seller and its representatives, reasonable access to
personnel and records of Seller and Buyer, as applicable, relating
to the Business to the extent Buyer and Seller shall reasonably
request such access.
(c) Retention of Records. Following the Closing, Buyer
agrees to retain or cause its subsidiaries (including the
Subsidiaries) to retain the books, records, documents, instruments,
accounts, correspondence, writings, evidences of title, Tax Returns
(including, without limitation, returns related to VAT) and other
papers relating to the operation of the Business prior to the
Closing Date for seven years or for such longer period as may be
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required by any law or court order applicable to Seller or any of
its subsidiaries and disclosed to Buyer and, in any event, to
notify Seller prior to the destruction or other disposition of any
of such materials and, upon Seller's request, to turn over to
Seller any of such materials the proposed destruction of which was
notified to Seller.
4.2 Conduct of the Business Prior to the Closing Date.
Seller agrees that, except as provided in this Agreement, as
consented to or approved in writing by Buyer (which approval shall
not be unreasonably withheld) or as set forth in Schedule 4.2
hereto, during the period commencing on the date hereof and ending
at the Closing Date:
(i) the Business shall be conducted only in the ordinary
course of business consistent with past practice and Seller
shall use its best efforts to (a) preserve intact the Business
and related relationships with customers, suppliers and other
parties with whom it has business relationships and (b) keep
available the services of present employees (it being
understood that Buyer assumes the risks associated with
personnel changes customarily attendant to a change of
ownership);
(ii) none of the Subsidiaries will amend its Certificate
of Incorporation or By-laws or other constituent documents;
(iii) none of the subsidiaries of Seller which is a
shareholder of any of the Subsidiaries will resolve to, and
none of the Subsidiaries will or will agree to, (A) issue,
sell, pledge, transfer, repurchase or redeem any shares of
capital stock of any class or series, or any securities
convertible into or exchangeable for shares of capital stock
or issue any options, warrants or other rights to acquire any
shares of capital stock or (B) declare any dividend, make any
distribution with respect to any class or series of its
capital stock or share capital, or repurchase or otherwise
acquire or grant, sell or pledge any shares of its capital
stock or other equity interest, in each case other than cash
dividends and distributions or as contemplated in Section 4.3
or 4.5;
(iv) Seller and its subsidiaries (other than the
Subsidiaries) in connection with the Business will not and
none of the Subsidiaries will (A) acquire, license, sub-license,
dispose of, lease, sub-lease, transfer or subject to
a Lien any properties or assets, other than (1) in the
ordinary course of business, (2) properties or assets which in
the aggregate are not material to the Business, (3) transfers
between Subsidiaries, (4) dispositions or transfers of
properties or assets which (i) were owned by a Subsidiary on
the date of the Initial Statement of Assets and Liabilities,
(ii) are not reflected on the Initial Statement of Assets and
Liabilities and (iii) do not relate to the Business or (5)
dispositions or transfers of properties or assets acquired by
a Subsidiary subsequent to the date of the Initial Statement
of Assets and Liabilities which are used less than primarily
in the Business; (B) waive any claims or rights, except (1)
claims or rights which in the aggregate are not material to
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the Business or (2) for cancellation and waivers of
intercompany indebtedness or claims not assigned to or assumed
by Buyer hereunder; (C) grant or approve any increase in the
compensation of Scheduled Employees (as hereinafter defined)
or Employees of the Subsidiaries (including, without
limitation, any increase in existing, or any creation of new,
severance or termination pay obligations), or grant or approve
any bonus, in each case, except for increases in the ordinary
course of business and consistent with past practice or as a
result of collective bargaining or as required by any
employment or other agreement, any policy or any bonus,
pension, profit-sharing or other plan or commitment presently
in effect; (D) enter into employment agreements with any
employee, except for any new hires or promotions in the
ordinary course of business and consistent with past practice;
(E) adopt or amend any bonus, profit sharing, compensation,
stock option, pension, retirement, deferred compensation,
employment or other plan, agreement trust, fund or arrangement
for the benefit of Scheduled Employees (as hereinafter
defined) or Employees of the Subsidiaries, except as may be
required to comply with applicable law or as may have been
contemplated by Seller and disclosed to Buyer in writing prior
to the date hereof; (F) make any capital expenditure, other
than (1) in the ordinary course of business or (2) pursuant to
existing business plans disclosed to Buyer prior to the date
hereof; (G) terminate or extend any Business Contract or enter
into any contract that would be a Material Contract; (H) fail
to maintain insurance coverage at levels consistent with
presently existing levels; (I) incur or assume any
liabilities, obligations or indebtedness for borrowed money or
guarantee such liabilities, other than (1) in the ordinary
course of business and consistent with past practice and (2)
liabilities, obligations or indebtedness which shall not be
Assumed Liabilities and for which neither Buyer nor any
Designee of Buyer nor any Subsidiary shall otherwise be liable
or responsible; provided that in no event shall long-term
indebtedness for borrowed money be incurred; (J) make any Tax
elections that have a continuing effect upon the Business
after the Closing (other than "check the box" elections in
connection with the transactions contemplated by this
Agreement); (K) enter into any lease of real property, except
renewals of existing leases in the ordinary course of business
(it being understood that Buyer shall have the right to
participate in the decision as to whether to renew any such
lease); (L) enter into any contract or agreement or engage in
any other type of transaction with Seller or any of its
affiliates (other than between Subsidiaries) other than in the
ordinary course of business and consistent with past practice
or as contemplated by this Agreement; (M) make any material
change in inventory policies and procedures, credit policies,
or advertising policies and procedures in respect of the
Business, in each case other than in the ordinary course of
business; (N) do any other act which would cause any
representation or warranty of Seller in this Agreement to be
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or become untrue in any material respect; (O) hire any
employee whose base annual salary would exceed $150,000; (P)
revalue any of the Assets or any assets of any of the
Subsidiaries (including, without limitation, writing up or
down the value of inventory) except as required by GAAP; (Q)
fail to use commercially reasonable efforts to maintain
capital expenditures for the Business at levels materially
equivalent to historical levels to the extent requested by
members of Buyer's or any of its subsidiaries' management who
will be directly responsible for managing the Business or the
relevant portion thereof; (R) take affirmative steps with
respect to claims or causes of action other than to satisfy
legal obligations or to preserve legal rights, unless
otherwise instructed by Buyer; (S) assert unasserted claims or
causes of action; or (T) agree, whether in writing or
otherwise, to do any of the foregoing.
(v) Seller shall not, and shall cause its subsidiaries
to not, (i) amend or modify any terms of, or waive any
material rights under, any Business Contracts other than in
the ordinary course of business or (ii) dispose of any Stock.
Nothing in this Agreement, including, without limitation,
in this Section 4.2, shall limit the ability of Seller and its
subsidiaries (other than the Subsidiaries) to transfer Assets to,
in the case of Seller, any subsidiary of Seller (including a
Subsidiary) and, in the case of any subsidiary of Seller (other
than the Subsidiaries) to Seller or another subsidiary of Seller
(including a Subsidiary) in order to facilitate the transfer of the
Assets, but not the Excluded Assets, to Buyer at Closing.
4.3 Intercompany Accounts, Debt. (a) Intercompany
Accounts. The Subsidiaries on the one hand, and Seller (which, for
purposes of this Section 4.3 shall include the subsidiaries of
Seller other than the Subsidiaries), on the other hand, maintain
and will up to the Closing Date maintain certain intercompany
payables and intercompany receivables (the "Intercompany Account")
reflecting indebtedness between the Subsidiaries, on the one hand,
to or from Seller, on the other hand.
(b) Settlement of Intercompany Debt. If, as of the
Closing Date, the Net Intercompany Debt in the Intercompany Account
consists of a net indebtedness of the Business to Seller, Seller
shall, prior to or simultaneously with the Closing, contribute or
cause to be contributed such Net Intercompany Debt in the
Intercompany Account to the Business, or, if not contributed will,
prior to or simultaneously with the Closing, cause such Net
Intercompany Debt in the Intercompany Account to be settled or to
be eliminated in some other manner which does not have a Material
Adverse Effect (it being understood that the actions contemplated
by Section 4.5 shall be deemed not to have a Material Adverse
Effect). If, as of the Closing Date, the Net Intercompany Debt in
the Intercompany Account consists of a net indebtedness of Seller
to the Business, Seller shall, prior to or simultaneously with the
Closing, cause the Business to cancel or dividend such indebtedness
to Seller, or, if not cancelled or dividended, will, prior to the
Closing, cause the same to be settled or to be eliminated in some
other manner which does not have a Material Adverse Effect (it
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being understood that the actions contemplated by Section 4.5 shall
be deemed not to have a Material Adverse Effect). As used herein,
the term "Net Intercompany Debt" shall mean (i) all intercompany
liabilities of the Business to Seller in the Intercompany Account
less (ii) the sum of all intercompany receivables due to the
Business from Seller in the Intercompany Account.
4.4 Antitrust Laws. Seller and Buyer agree to cooperate
and use their best efforts to make all filings which are or may
become required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "Antitrust Improvements Act"), in the
United States and the Mergers and Takeovers (Control) Act 1978-1996
in Ireland (the "Mergers Act"). Seller and Buyer will furnish each
other such necessary information and reasonable assistance as the
other may reasonably request in connection with its preparation of
necessary filings or submissions to any United States or foreign
governmental agency or body of competent jurisdiction. Seller and
Buyer will supply each other copies of all pre-Closing
correspondence, filings or communications (or memoranda setting
forth the substance thereof) between such party or its subsidiaries
or their respective representatives, on the one hand, and the
Federal Trade Commission (the "FTC"), the Antitrust Division of the
United States Department of Justice (the "Antitrust Division"), the
Department of Enterprise, Trade and Employment in Ireland or any
other United States or foreign governmental, international or
supranational agency or body of competent jurisdiction or authority
or members of their respective staffs, on the other hand, with
respect to the Transaction Agreements and the transactions
contemplated hereby other than any of such information filed
pursuant to Items 4(c) and 5 of the Xxxx-Xxxxx-Xxxxxx Notification
and Report Form or communications regarding the same or information
or documents of a similar confidential nature.
4.5 Cash Management. At the Closing, Seller shall
endeavor to cause the combined Cash Balances to be held at Closing
by the Subsidiaries to be equal to zero. It is understood and
agreed that in achieving such Cash Balances, notwithstanding
anything to the contrary contained in this Agreement, Seller,
directly or indirectly through its subsidiaries, may cause the Cash
Balances of the Subsidiaries to be distributed to Seller or its
other affiliates at or prior to the Closing, whether or not in the
ordinary course of business. Buyer and Seller acknowledge and
agree that in the event the combined Cash Balances held by the
Subsidiaries do not equal zero, the amount of the balance will be
reflected on the Final Statement of Assets and Liabilities for all
purposes, including, without limitation, for purposes of
determining the adjustment to the Purchase Price pursuant to
Section 1.3(e) and for inclusion as an Asset. For purposes of this
Section 4.5, "Cash Balances" shall mean the sum of all (i) cash and
cash equivalents on deposit in any bank account, money market
account, certificate of deposit or comparable accounts in the name
of any Subsidiary, (ii) xxxxx cash held by any Subsidiary and (iii)
undeposited checks in the possession of any Subsidiary, in each
case at the close of business on the Closing Date.
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4.6 Further Actions. (a) Approvals, Filings and
Defense of Proceedings. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including, without
limitation, using its best efforts: (i) to obtain, in addition to
approvals contemplated by Section 4.4 hereof, any licenses,
permits, consents, approvals, authorizations, qualifications and
orders of federal, state, local and foreign governmental
authorities as are required in connection with the consummation of
the transactions contemplated hereby and by the Ancillary
Agreements; (ii) to effect, in addition to the filings contemplated
by Section 4.4 hereof, all necessary registrations and filings
including, without limitation, required registrations and filings
with foreign governmental authorities; (iii) to defend any lawsuits
or other Legal Proceedings, whether judicial or administrative,
whether brought derivatively or on behalf of third parties
(including, without limitation, governmental agencies or
officials), challenging this Agreement or the Ancillary Agreements
or the consummation of the transactions contemplated hereby or
thereby; and (iv) subject to appropriate confidentiality
protections, to furnish to each other such information and
assistance and to consult with respect to the terms of any
registration, filing, application or undertaking as reasonably may
be requested in connection with the foregoing. Notwithstanding
anything to the contrary in this Section 4.6 or in Section 4.4 or
4.15, no party shall have the obligation under this Section 4.6 or
under Section 4.4 or 4.15 to (i) dispose or cause any of its
subsidiaries to dispose of any assets, (ii) license or cause any of
its subsidiaries to license any technology or intellectual property
rights, (iii) make any changes to its operations or proposed
operations or to the operations or proposed operations of any of
its subsidiaries or (iv) make any commitment (to any governmental
authority or otherwise) regarding its future operations, or the
future operations of any of its subsidiaries, or the future
operations of the Business (even though the disposition of such
assets, the granting of such licenses or the making of such change
or commitment might facilitate the obtaining of a required approval
from a governmental authority or might otherwise facilitate the
consummation of the transactions contemplated hereby).
(b) Consents. Seller shall use its best efforts to
obtain prior to or concurrently with (or, if not obtained prior to
or concurrently, subsequent to) the Closing all consents in forms
reasonably satisfactory to Buyer, in each case required by any
material contracts, leases, licenses and other agreements to which
any Subsidiary is a party or which constitute Assets, and Buyer
will cooperate in order to obtain such consents.
(c) Mail. Each party hereto authorizes and empowers the
other party hereto on and after the Closing Date to receive and
open all mail received by such party relating to the Business or
the Assets and to deal with the contents of such communications in
any proper manner. Buyer and its subsidiaries are authorized to
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open mail received by them that relates to Excluded Assets or to
Seller's operations not relating to the Business. Seller shall
promptly deliver to Buyer any mail or other communication received
by it after the Closing Date pertaining to the Business or the
Assets and any cash, checks or other instruments of payment (with
all necessary endorsements) to which Buyer or any of its
subsidiaries (including the Subsidiaries) or its Designees is
entitled and will use its best efforts to advise Buyer with respect
to oral communications pertaining to the Business. Buyer shall
promptly deliver to Seller any mail or other communication received
by it after the Closing Date pertaining to the Excluded Assets to
be retained by Seller or otherwise belonging to Seller and not
relating to the Business, and any cash, checks or other instruments
of payment (with all necessary endorsements) required to be
remitted to Seller in respect thereof.
(d) Full Benefit of this Agreement. Seller and Buyer
shall do or procure to be done all such further acts and things,
and execute or procure the execution of all such other documents,
as such other party may from time to time reasonably require,
whether on or after Closing, for the purpose of giving to such
other party the full benefit of all the provisions of this
Agreement. In this regard but without limitation, after the
Closing Date, Buyer shall take all actions (or shall cause its
subsidiaries (including the Subsidiaries) to take all actions)
reasonably requested by Seller to return to Seller (i) all
properties and assets identified in Section 1.1(c) that may be in
the possession of Buyer or its subsidiaries (including the
Subsidiaries) and (ii) all properties and assets of the
Subsidiaries that were properties or assets of a Subsidiary on the
Closing Date but that are not reflected on the Final Statement of
Assets and Liabilities and which do not relate to the Business,
except as otherwise contemplated by the Ancillary Agreements.
(e) Non-assignable Agreements. Anything in this
Agreement to the contrary notwithstanding, nothing in this
Agreement shall be construed as an attempt to assign or transfer
any contract or agreement that is by its terms or at law
non-assignable without the consent of the other party thereto and
as to which such consent shall not have been given. In order,
however, that the full value of every contract and agreement of the
character described in the immediately preceding sentence and all
claims and demands relating to such contracts and agreements may be
realized, Seller or its subsidiaries, as applicable, shall, to the
extent reasonably possible and to the extent it would not impose
any material obligation on Seller or any of its subsidiaries (other
than the Subsidiaries), keep such contracts and agreements in
effect and shall give Buyer or its Designee the benefit of each
such agreement to the same extent as if it had been assigned, and
Buyer or its Designee shall perform for the benefit of the Seller
or its subsidiaries, as applicable, the obligations under the
contract or agreement relating to the benefit obtained by Buyer or
its Designee. Upon the receipt by Buyer or Seller following the
Closing Date of the consent of the other party to any such contract
or agreement that is by its terms or at law non-assignable without
such consent, such contract or agreement shall, without any further
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action on the part of Buyer or Seller, be deemed to have been
assigned by Seller or its subsidiaries, as applicable, to Buyer or
its Designee and assumed by Buyer or its Designee as of the date of
such consent.
4.7 Covenant Not to Compete. In order that Buyer and
its subsidiaries may have and enjoy the full benefit of the
Business, Seller agrees that Seller and its subsidiaries will not,
without the written approval of Buyer, for the period beginning on
the Closing Date and ending on the fifth anniversary of the Closing
Date (the "Noncompetitive Period"): (i) engage, directly or
indirectly, in any activity involving the manufacture, production,
marketing, advertising, distribution or sale of any Competitive
Product anywhere in the world (after giving effect to the
exceptions contained in the second succeeding sentence, the
"Competitive Activity"), (ii) directly or indirectly, (A) hold or
invest in any equity (or debt convertible into equity) of, (B)
manage, operate or control, (C) become a consultant with respect to
any Competitive Activity for or (D) provide material services for
any Competitive Activity to, any Person that engages in any
Competitive Activity or (iii) license, sublicense or otherwise make
available to any person any technology or other intellectual
property rights that would facilitate such person's engaging in any
Competitive Activity. "Competitive Products" means (i) the
products in any of the categories set forth in the recitals hereto,
(ii) catheter-based, wire-based, balloon-based or stent-based
products used in coronary applications and (iii) products that are
competitive with any products of the type referred to in the
foregoing clause (i) or (ii). Notwithstanding the foregoing,
nothing contained herein shall limit the right of Seller or any
subsidiary of Seller to (i) hold and make passive investments in
securities of any person that is registered on a national
securities exchange or admitted to trading privileges thereon or
actively traded in a generally recognized over-the-counter market;
provided, that Seller's and any such subsidiary's aggregate
beneficial equity interest therein shall not exceed 10% of the
outstanding shares or interests in such person; (ii) engage,
directly or indirectly, in any Competitive Activity or any activity
otherwise prohibited by clause (ii) or clause (iii) of the second
preceding sentence with respect to the products identified in
Schedule 4.7(i); (iii) engage, directly or indirectly, in any
Competitive Activity or any activity otherwise prohibited by clause
(ii) or clause (iii) of the second preceding sentence with respect
to Competitive Products for non-coronary applications; (iv) engage
in any transaction whereby, directly or indirectly, it acquires
(whether by merger, stock purchase, purchase of assets or
otherwise) any person or business, or any interest in any person or
business, engaged, directly or indirectly, in any Competitive
Activity at the time of such acquisition; provided, that within one
year of any such transaction, Seller or the applicable subsidiary
or subsidiaries of Seller shall dispose of the portion of the
entity or division engaged in the Competitive Activity or cause
such portion of the entity or division to cease the Competitive
Activity and, provided, further, pending such disposition or
cessation of the Competitive Activity, Seller puts into place
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procedures reasonably designed to ensure the autonomy and
independence of the entity or division engaged in such Competitive
Activity; (v) engage, directly or indirectly, in any activity
involving the covering or coating of stents manufactured by third
parties; provided, that neither Seller nor any of its subsidiaries
markets, advertises, distributes or sells such covered or coated
stents; or (vi) engage, directly or indirectly, in any activity
that Seller or its subsidiaries are expressly authorized to perform
pursuant to the terms of the Ancillary Agreements. Except as the
parties shall otherwise agree, for a period of two years after the
Closing Date, Seller and its subsidiaries shall not, directly or
indirectly, hire or solicit to hire any Transferred Employee to
leave (or cause or seek to cause to leave) the employ of Buyer or
any subsidiary or affiliate of Buyer; provided, however, that the
foregoing provision will not prevent Seller or any of its
subsidiaries from hiring any Transferred Employee who (a) has not
been employed by Buyer or its subsidiaries during the preceding six
months, (b) whose employment was terminated by Buyer or one of
subsidiaries or (c) responds to a general solicitation of
employment not specifically directed towards employees of Buyer or
its subsidiaries. Buyer and Seller shall negotiate in good faith
to identify one employee from each of categories A, B and C on
Schedule 4.7(ii) to be hired by Seller or one of its subsidiaries.
Any such hiring or any discussions with such employees (after such
employees have been jointly identified by Buyer and Seller) in the
context of such negotiations shall be deemed not to violate the
preceding sentence.
4.8 Qualifying Shares. Seller shall arrange for the
sale, upon terms and conditions satisfactory to Buyer, by the owner
thereof to the Buyer or one or more of its nominees at the Closing,
of the qualifying shares of Bard Ireland and Bard Galway owned by
nominees of Seller.
4.9 Business Records. After the Closing Date, Buyer
shall, or shall cause its subsidiaries, as applicable, to, provide
to Seller at any reasonable time upon reasonable prior notice and
from time to time, such access to and copies of the Assets
identified in Sections 1.1(b)(iii) and (xv) (other than computer
systems and computer hardware) which are not related exclusively to
the Business as Seller may from time to time reasonably request.
Buyer shall also cause the Subsidiaries to provide access upon such
terms to Seller of similar items owned (other than computer systems
and computer hardware) by the Subsidiaries on the Closing Date to
the extent not related exclusively to the Business. Similarly,
Seller shall, and shall cause its subsidiaries, as applicable, to,
provide access upon such terms to similar items owned by Seller and
its subsidiaries after the Closing Date which are used in the
Business on the Closing Date.
4.10 Use of Names and Logos. It is expressly agreed that
neither Buyer nor any Designee is purchasing or acquiring any right
(except as specifically contemplated in this Section 4.10), title
or interest in any names, trade names, trademarks, identifying
logos or service marks employing the words "X. X. Xxxx, Inc." or
any part or variation thereof, including, without limitation, the
name "Bard", or any name, trade name, trademark or logo confusingly
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or misleadingly similar thereto (collectively, the "Seller's
Trademarks and Logos"). As promptly as practicable, but in no
event later than 180 days following the Closing Date, Buyer shall,
and shall cause each of its subsidiaries (including the
Subsidiaries) to, remove, strike over or otherwise obliterate all
the Seller's Trademarks and Logos from all materials constituting
their properties and assets, including, without limitation, any
business cards, stationery, displays, signs, promotional materials,
manuals, forms and other materials, if such materials are
distributed or made available or proposed to be distributed or made
available to third parties; provided, that Buyer and each of its
subsidiaries (including the Subsidiaries) shall cease using
invoices, stationery and business cards containing the Seller's
Trademarks and Logos no later than 60 days after the Closing Date
(or such later time to the extent required by applicable law). In
addition, Buyer shall, as promptly as practical, but in no event
later than 60 days following the Closing Date, cause each
Subsidiary to change its name so as to omit any of the Seller's
Trademarks and Logos therefrom. Buyer agrees that none of it, its
subsidiaries (including the Subsidiaries) or any of their
affiliates shall make any use of the Seller's Trademarks and Logos
from and after the expiration of 180 days after the Closing Date.
4.11 Ancillary Agreements. Buyer and Seller shall, or
shall cause their subsidiaries, as applicable, to, enter into (i)
the Intellectual Property License Agreement substantially in the
form of Exhibit B hereto (the "IP Agreement") and (ii) one or more
agreements substantially on the terms and conditions set forth in
Exhibit C hereto (the "IMPRA Agreement"). Buyer and Seller shall
negotiate in good faith (i) one or more transition agreements
relating to the provision to Buyer and Seller and their respective
subsidiaries and successors of the transition services necessary to
permit, in the case of Buyer, the continued operation of the
Business and, in the case of Seller, the continued operation of its
businesses other than the Business (the "Transition Agreement") and
(ii) a 99-year, triple-net lease providing for the lease by Buyer
or one of its subsidiaries to Seller or its Designee of Building 3
at the Billerica, Massachusetts Facility (the "Lease") (it being
understood that such lease will provide for lease payments of $2.00
per year, have other terms and conditions customary for leases of
such type and contain terms designed to shift to Seller or one of
its Designees the economic burden of ownership of the property
subject to the Lease). The IP Agreement, the IMPRA Agreement, the
Transition Agreement and the Lease are referred to herein
collectively as the "Ancillary Agreements".
4.12 Intentionally Omitted.
4.13 Notification of Certain Matters. To the extent they
have knowledge thereof, Seller shall give prompt notice to Buyer,
and Buyer shall give prompt notice to Seller, of the occurrence, or
non-occurrence, of any event the occurrence or non-occurrence of
which will cause (i) any representation or warranty of Seller or
Buyer, as the case may be, contained in this Agreement to be untrue
or incorrect in any respect that would result in the condition to
Closing set forth in Section 5.2(a) or 5.2(b), as the case may be,
not being satisfied or (ii) Seller or Buyer, as the case may be, to
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fail to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 4.13 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such
notice.
4.14 Confidentiality. Prior to and subsequent to the
Closing, except as required by law, regulation, legal or judicial
process or any stock exchange or over-the-counter market on which
Seller's stock is listed or admitted for trading (it being
understood that Seller shall give prompt prior notice to Buyer of
any such requirement), Seller shall keep confidential, and cause
its subsidiaries and instruct its and their officers, directors,
employees and advisors to keep confidential, all information
relating to the Subsidiaries, the Assets, the Business (except
Seller need not keep confidential information with respect to
activities in which Seller is permitted to engage pursuant to
Section 4.7) and the Buyer and its subsidiaries, except for
information (i) that was, is or becomes available to the public
other than as a result of a breach of this Section 4.14, (ii) with
respect to Buyer and its subsidiaries that is or becomes available
to Seller on a nonconfidential basis from a source other than Buyer
and (iii) with respect to the Subsidiaries, Assets and the Business
that becomes available to Seller after the Closing Date on a
nonconfidential basis from a source other than Buyer or its
subsidiaries, affiliates, representatives or former employees.
Notwithstanding the foregoing, Seller and its subsidiaries shall,
subject to confidentiality provisions consistent with those
contained in the preceding sentence, be entitled to make available
to any acquiror of any business or assets of Seller who would have
an interest therein, any of the information that Seller or Buyer
has agreed to make available to the other pursuant to Section 4.9.
The covenant set forth in this Section 4.14 shall terminate two (2)
years after the Closing Date.
4.15 Best Efforts. Subject to the terms and conditions
of this Agreement, each party shall use its best efforts to cause
the Closing to occur.
4.16 Financial Statements. Prior to the Closing, Seller
shall provide to Buyer (i) the audited combined statements of
operations, combined statements of cash flows and combined
statements of parent company investment and advances in the
Business for the years ended December 31, 1995, 1996 and 1997, (ii)
the audited combined balance sheets of the Business as of December
31, 1996 and 1997 and (iii) the unaudited combined balance sheet as
of June 30, 1998 and the unaudited combined statements of
operations and combined statements of cash flows and combined statements
of parent company investment and advances in the Business for
the six months ended June 30, 1997 and 1998 which are in accordance
with GAAP and conform to the requirements of Regulations S-X of the
Securities and Exchange Commission. Notwithstanding the foregoing
provisions of this Section 4.16, Seller may provide financial statements in
such lesser scope and/or detail as the Securities and Exchange
Commission may, by formal action or informal advice provided to
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Buyer, permit in connection with the filing by Buyer of a Current
Report on Form 8-K in connection with the transactions contemplated
by this Agreement. In this regard, Buyer agrees to use its best
efforts to obtain such formal action or informal advice prior to
the Closing.
4.17 Intentionally Omitted.
4.18 Liabilities Assumed by Seller. On the Closing
Date, Seller shall, or shall cause one or more of its Designees to,
assume only the Liabilities of the Subsidiaries which (i) do not
relate to the Business, (ii) are not reflected on the Final
Statement of Assets and Liabilities and (iii) arise from, out of or
in connection with circumstances, acts or omissions prior to the
Closing Date.
4.19 Estoppel Certificates. Sellers agrees to use best
efforts to obtain prior to the Closing landlord estoppel
certificates with respect to material facilities that are the
subject of leases which constitute Assets and with respect to
material facilities that are leased by the Subsidiaries.
4.20 Release of Subsidiaries. From and after the
Closing, the Seller, for itself and its subsidiaries, hereby
releases each Subsidiary from any claims or demands that Seller or
its subsidiaries may have against such Subsidiary to the extent
arising from, out of or in connection with any circumstances, acts
or omissions prior to the Closing, except for claims or demands
that the Seller or any of its subsidiaries may have pursuant to
this Agreement or any of the Ancillary Agreements.
4.21 Permits. As promptly as practicable but in any
event within 30 days of the date of this Agreement, Seller shall
provide to Buyer a schedule of the Material Permits which are not
Assets or which are not owned by a Subsidiary or which will be
terminated or revoked in connection with the transactions
contemplated by this Agreement. Buyer shall use its best efforts
to obtain such or comparable Material Permits prior to the Closing.
To the extent Buyer is not able to obtain such or comparable
Material Permits prior to the Closing, Seller and Buyer shall
negotiate in good faith, prior to the Closing, such arrangements as
shall be reasonably satisfactory to Seller and Buyer to enable the
continued operation of the Business in substantial compliance with
all Laws. Similarly, Buyer acknowledges that certain of the
Material Permits or similar items that are owned by one or more
Subsidiaries (and that will not be terminated or revoked in
connection with the transactions contemplated by this Agreement)
may be material to the conduct of one or more businesses of Seller
other than the Business ("Material Non-Business Permits"). Seller
shall use its best efforts to obtain such or comparable Material
Non-Business Permits prior to the Closing. To the extent Seller is
not able to obtain such or comparable Material Non-Business Permits
prior to the Closing, Seller and Buyer shall negotiate in good
faith such arrangements as shall be reasonably satisfactory to
Seller and Buyer to enable the continued operation of such other
business or businesses in compliance with all Laws, except to the
extent that the failure to comply therewith would not have a
material adverse effect on Seller or any of its subsidiaries or on
any such business or businesses.
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4.22 Non-Solicitation. Seller agrees that neither it nor
any of its subsidiaries nor any of the officers, directors,
employees or representatives of Seller or any of Seller's
subsidiaries shall solicit, encourage, engage in any negotiations
relating to, provide any information with respect to or enter into
any proposal, plan, agreement, understanding or arrangement
contemplating, a direct sale or other direct disposition of any
material portion of the assets of the Business or the Stock.
4.23 Insurance Claims. In the event Buyer Indemnified
Parties or Seller Indemnified Parties seek indemnification for
Damages pursuant to Article VIII or Article VI, the party seeking
indemnification shall use its best efforts to recover in respect of
the applicable Damages under all applicable third-party insurance
policies held by such party. The party seeking indemnification
shall not, except with the consent of the indemnifying party (which
consent shall not be unreasonably withheld), enter into any
settlement with any insurance provider with respect to any such
claims. In the event the party seeking indemnification receives
insurance proceeds for claims with respect to Damages for which the
indemnifying party has previously indemnified the indemnified
party, the party securing indemnification will promptly pay such
proceeds to the indemnifying party up to the amount previously paid
by the indemnifying party as indemnification with respect to such
Damages.
4.24 Litigation Expenses. Subject to Sections 4.2(iv)(R)
and 4.2(iv)(S), Buyer agrees to reimburse Seller and its
subsidiaries promptly upon demand for all out-of-pocket fees, costs
and expenses (including, without limitation, legal fees and
expenses) incurred by Seller or its subsidiaries, as the case may
be, between the date of this Agreement and the Closing Date in
connection with the prosecution of any claims or causes of action
identified in Section 1.1(b)(xiv).
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions Precedent to Obligations of Parties. The
respective obligations of Buyer and Seller to consummate the
transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing Date, of each of the
following conditions:
(a) No Injunction. At the Closing Date, (i) there shall
be no injunction, restraining order, decision or decree of any
nature of any United States or foreign court or governmental agency
or body of competent jurisdiction that is in effect that makes
illegal, restrains or prohibits in any respect the consummation of
the transactions contemplated hereby and (ii) there shall be no
continuing suit or proceeding instituted by any United States or
foreign governmental authority or body of competent jurisdiction
which seeks to enjoin, restrain or prohibit the consummation of the
transactions contemplated hereby in whole or material part.
Notwithstanding the foregoing, the condition set forth in this
Section 5.1(a) shall not be a condition to the obligations of a
party to consummate the transactions contemplated by this Agreement
if the consummation of the transactions contemplated by this
Agreement, notwithstanding that the condition set forth in this
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Section 5.1(a) has not been satisfied, would not be reasonably
likely to have a material adverse effect on such party or any
entity that would be a subsidiary of such party after the Closing.
(b) Regulatory Authorizations. All (i) consents,
approvals, authorizations and orders of federal, state, local and
foreign governmental and regulatory authorities of competent
jurisdiction as are necessary in connection with the lawful
transfer of the Stock and Assets to Buyer or its Designees and the
execution and performance of the Transaction Agreements or which if
not obtained (x) would be reasonably likely to subject Buyer,
Seller or any of their respective subsidiaries, or any officer,
director or agent of any such person to civil or criminal
liability, (y) would be reasonably likely to result in the loss by
Buyer of material benefits under the Transaction Agreements, or (z)
could render such transfer void or voidable shall have been
obtained; (ii) applicable waiting periods, including extensions
thereof, specified under the Antitrust Improvements Act with
respect to the transactions contemplated by this Agreement shall
have lapsed or been terminated and any investigations relating to
the transactions contemplated hereby that may have been opened by
either the Department of Justice or the Federal Trade Commission by
means of a request for additional information or otherwise shall
have terminated; and (iii) confirmation shall have been received
from the Minister for Enterprise Trade and Employment of Ireland
(the "METE") that (A) the METE has decided not to make an order
under Section 9 of the Mergers Act in relation to the sale and
purchase of the shares in Bard Ireland, Bard Galway and Bard
Connaught; or (B) the METE has made a conditional order in relation
to such sale and purchase and Seller and Buyer are satisfied with
any conditions, requirements or terms subject to which such order
is made; or (C) the relevant period under Section 6 of the Mergers
Act expired without the METE having so made any order.
Notwithstanding the foregoing, the condition set forth in this
Section 5.1(b) shall not be a condition to the obligations of a
party to consummate the transactions contemplated by this Agreement
if the consummation of the transactions contemplated by this
Agreement, notwithstanding that the condition set forth in this
Section 5.1(b) has not been satisfied, would not be reasonably
likely to have a material adverse affect on such party or any
entity that would be a subsidiary of such party after the Closing.
(c) Ancillary Agreements. Buyer and Seller and/or their
respective subsidiaries, as applicable, shall have entered into the
Ancillary Agreements.
5.2 Conditions Precedent to Obligation of Buyer. The
obligation of Buyer to consummate the transactions contemplated by
this Agreement is subject to the satisfaction or waiver by Buyer at
or prior to the Closing Date of each of the following additional
conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Seller contained herein shall be
true and correct in all material respects (with such materiality
determined in the context of the Business taken as a whole) as of
the date hereof and at, and as of, the Closing Date, with the same
force and effect as though made at and as of the Closing Date,
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except for changes expressly permitted or contemplated by this
Agreement and except that, to the extent any representation or
warranty is made as of a specified date, it need be true only as of
such date (it being understood that, for purposes of determining
the truth and correctness of Seller's representations and
warranties, all Material Adverse Effect and materiality qualifiers
(including those dollar thresholds and other materiality qualifiers
incorporated in the definition of Business Contracts) contained in
such representations and warranties shall be disregarded).
(b) Performance of Agreement. Seller and its
subsidiaries shall have in all material respects performed all
obligations and agreements, and complied with all covenants
contained in this Agreement to be performed or complied with by
Seller and/or its subsidiaries prior to or at the Closing.
(c) Certificate. Buyer shall have received a
certificate of Seller, dated as of the Closing Date, executed on
behalf of Seller by any Vice President, to the effect that the
conditions specified in paragraphs (a) and (b) above have been
fulfilled, and, for purposes of this Agreement, by the delivery of
such certificate, Seller shall be deemed to have made a
representation and warranty to Buyer as to the matters set forth in
such certificate.
(d) Consents; Third-Party Rights; Filings; Notices.
Buyer shall have received evidence reasonably satisfactory to it
that the consents, approvals, filings and required notices set
forth in Schedule 5.2(d) hereto have been obtained, made or given
(and are in full force and effect).
(e) Resignations. The directors of the Subsidiaries
identified by Buyer prior to the Closing Date and, in the case of
Bard Japan, the statutory auditors, shall have tendered their
resignations effective as of the Closing, in writing to the
applicable Subsidiary or, shall have otherwise been removed as of
the Closing Date, other than, in the case of Milu for directors
which Idus Holdings S.A. has the right to designate and, in the
case of X-trode, for the director and statutory auditor which Xxxx
Xxxxxx and Xxxxxxxx Xxxx, collectively, have the right to
designate.
(f) Required Items. Seller shall have made or caused to
be made delivery to Buyer of the items required by Section 2.2(a).
(g) Permits. Buyer or its affiliates, as applicable,
shall have obtained all Material Permits or shall have entered into
arrangements reasonably satisfactory to Buyer to enable the
continued operation of the Business substantially in compliance
with all Laws.
(h) Financial Information. The net sales of the
Business as reflected on or derived from the audited combined
statement of operations of the Business for the year ended December
31, 1997 delivered to Buyer pursuant to Section 4.16 (the "1997
Statement of Operations") shall not be less than $205,607 (which
represents 95% of the net sales of the Business as reflected on the
Special Purpose Coronary Cath Lab 1997 Financial Review attached as
Exhibit D hereto (the "Financial Review"); the gross profit of the
Business as reflected on or derived from the 1997 Statement of
Operations shall not be less than $107,925 (which represents 95% of
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the gross profits of the Business as reflected on the Financial
Review)); and the total direct commercial expenses of the Business
as reflected on or derived from the 1997 Statement of Operations
shall not be more than $85,886 (which represents 105% of the total
direct commercial expenses as reflected on the Financial Review).
Total direct commercial expenses shall be derived from the 1997
Statement of Operations on the same bases set forth in the
Financial Review.
5.3 Conditions Precedent to Obligation of Seller. The
obligation of Seller to consummate the transactions contemplated by
this Agreement is subject to the satisfaction or waiver by Seller
at or prior to the Closing Date of each of the following additional
conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Buyer contained herein shall be
true and correct in all material respects (with such materiality
determined in the context of the ability of Buyer and its
subsidiaries to consummate the transactions contemplated by the
Transaction Agreements) as of the date hereof and at, and as of,
the Closing Date, with the same force and effect as though made at
and as of the Closing Date, except for changes expressly permitted
or contemplated by this Agreement and except that, to the extent
any representation or warranty is made as of a specified date, it
need be true only as of such date (it being understood that, for
purses of determining the truth and correctness of Buyer's
representations and warranties, all Material Adverse Effect and
materiality qualifiers contained in such representations and
warranties shall be disregarded).
(b) Performance of Agreements. Buyer and its
subsidiaries shall have in all material respects performed all
obligations and agreements, and complied with all covenants
contained in this Agreement to be performed or complied with by
Buyer and/or its subsidiaries prior to or at the Closing,
including, without limitation, Buyer's obligations under Section
2.3.
(c) Certificate. Seller shall have received a
certificate of Buyer, dated as of the Closing Date, executed on
behalf of Buyer by any Vice President, to the effect that the
conditions specified in paragraphs (a) and (b) above have been
fulfilled, and, for purposes of this Agreement, by the delivery of
such certificate Buyer shall be deemed to have made a
representation or warranty to Seller as to the matters set forth in
such certificate.
(d) Required Items. Buyer shall have made or caused to
be made delivery to Seller of the items required by Section 2.3.
(e) Permits. Seller or its affiliates, as applicable,
shall have obtained all Material Non-Business Permits or shall have
entered into arrangements reasonably satisfactory to Seller to
enable the continued operation of such business or businesses to
which the Material Non-Business Permits relate in substantial
compliance with all Laws.
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ARTICLE VI
PROVISIONS AS TO TAX MATTERS
6.1 Tax Indemnification. (a) Seller's Indemnification
Obligation. Except as provided in subparagraph (b) and Section
6.3, Seller shall indemnify and hold harmless Buyer and its
subsidiaries (including the Subsidiaries) from and against any and
all Taxes or other amounts payable (but not yet paid as of the
Closing Date) for or in respect of each of the following:
(i) any and all Taxes of the Subsidiaries (or any
predecessor) with respect to taxable periods actually ending
on or before the Closing Date (including, but not limited to,
any and all income Taxes attributable to the Pre-Closing
Straddle Period pursuant to Section 6.1(c) hereof, and not
previously paid, but only to the extent such Taxes, in the
aggregate, exceed the accrual established for Taxes on the
Final Statement of Assets and Liabilities;
(ii) any and all Taxes of any member other than any of
the Subsidiaries of an affiliated, consolidated, combined or
unitary group or equivalent group for VAT purposes of which
any Subsidiary (or any predecessor) is or was a member prior
to the Closing Date, for which any such Subsidiary may be
jointly or severally liable by reason of its inclusion in such
group prior to the Closing Date pursuant to Treasury
Regulation Section 1.1502-6(a) or any analogous or similar
state, local or foreign law or regulation; for the purpose of
this clause (ii) the term "VAT" means value added taxes or
similar sales or turnover tax of any relevant jurisdiction;
and
(iii) any Taxes arising out of a breach of the
representations and warranties contained in Section 3.1(i)
hereof; provided, that any claim with respect thereto under
this clause (iii) is made within the period of survivability
set forth in Section 3.3.
(b) Buyer's Indemnification Obligation. Except as
provided in subparagraph (a) and Section 6.3, Buyer shall be
responsible for, and shall indemnify Seller and its subsidiaries,
and with respect to clause (v) of this Section 6.1(b), in trust for
each and every controlling director (as such term is defined in
Section 629 of the Taxes Consolidation Act, 1997 of the Republic of
Ireland (the "Act")), against (i) any and all Taxes of the
Subsidiaries allocable to the Pre-Closing Straddle Period or any
other taxable period or portion thereof ending on or before the
Closing Date, but only to the extent such Taxes, in the aggregate,
do not exceed the accrual established for Taxes on the Final
Statement of Assets and Liabilities, (ii) any and all Taxes of a
Subsidiary or otherwise relating to the Business allocable to the
Post-Closing Straddle Period or any other taxable period or portion
thereof beginning after the Closing Date, (iii) any and all Taxes
imposed on Seller or any of its subsidiaries (including any
Subsidiary) which would not have been imposed but for actions,
decisions or elections undertaken or made by Buyer or any of its
subsidiaries (including a Subsidiary) after the Closing without
Seller's written consent, (iv) any interest or penalties that are
due solely to the failure of Buyer to timely file or cause to be
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filed any Tax Return pursuant to subparagraph (e)(i) below or for
which Buyer is responsible for filing pursuant to subparagraph (e)
below, (v) any Taxes arising under the Act, with respect to a
change in residence after the Closing Date of any one or more of
Bard Ireland, Bard Galway and Bard Connaught (which are under Irish
tax law, resident in Ireland at the Closing Date) from Ireland to
another jurisdiction and (vi) any incremental tax borne by Seller
or any of its subsidiaries as a result of any election by Buyer
under Section 338(g) of the Code with respect to any or all of the
Stock. If Buyer makes a timely request of Seller, then Seller
shall provide Buyer with an analysis of any incremental tax that
would be caused by an election under Section 338(g) of the Code in
a timely manner prior to Buyer making such election.
(c) Taxable Periods. Seller and Buyer shall, to the
extent permitted by applicable law, elect with the relevant Taxing
Authority to close the taxable period of the Subsidiaries as of the
end of the Closing Date. In any case where applicable law does not
permit any Subsidiary to close its taxable period as of the end of
the Closing Date, then, except as provided in subparagraph (b)
above, Taxes attributable to the taxable period of such Subsidiary
beginning before and ending after the Closing Date shall be
allocated between (i) the period up to the end of the Closing Date
("Pre-Closing Straddle Period") and (ii) the period subsequent to
the effective time of the Closing ("Post-Closing Straddle Period").
Such allocation shall be made by means of a closing of the books
and records of each Subsidiary as of the effective time of the
Closing; provided, that any items that are not reasonably
susceptible to such allocation (i.e., certain exemptions,
allowances and deductions) shall be apportioned on the basis of
elapsed days. "Taxing Authority" shall mean any taxing or other
authority in any relevant jurisdiction competent to impose any
liability for Taxes.
(d) Tax Claims. (i) Promptly after receipt by Buyer or
any of its subsidiaries of written notice of the assertion or
commencement of any claim, audit, examination, or other
proposed change or adjustment by any Taxing Authority
concerning any Taxes covered by Section 6.1(a) (each a "Tax
Claim"), Buyer shall notify Seller. Such notice shall contain
factual information (to the extent known by Buyer) describing
the asserted Tax Claim in reasonable detail and shall include
copies of any notice or other document received from any
Taxing Authority in respect of any such asserted Tax Claim.
The failure of Buyer to give Seller prompt notice as provided
herein shall not relieve Seller of any of its obligations
under Section 6.1 except to the extent such failure has a
material adverse effect on Seller's ability to defend the Tax
Claim.
(ii) Seller shall have the sole right to represent any
Subsidiary's interests in any Tax audit or administrative or
court or other proceeding or dealing relating to any Taxes
covered by Section 6.1(a) and to employ counsel of its choice.
Seller shall promptly notify Buyer if it decides not to
control the defense or settlement of any such Tax audit or
administrative or court proceeding and Buyer thereupon shall
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be permitted to defend and settle such Tax audit or proceeding
at Seller's reasonable expense. To the extent any negotiated
settlement would have a material Tax effect on a post Closing
Date year or portion thereof, Seller shall not agree to such
settlement without the consent of Buyer, which consent shall
not be unreasonably withheld; provided, however, that if Buyer
shall refuse to consent to any such settlement that Seller
proposed to accept, then (A) the liability of Seller with
respect to the subject matter of such settlement shall be
limited to the amount that such liability would have been if
such settlement had been accepted and (B) Buyer shall have the
right thereafter to control the defense and settlement of such
Tax audit or proceeding (it being understood that Buyer shall
be responsible for all expenses incurred thereafter in
connection with the contest of such Tax audit or proceeding
except to the extent that the final settlement imposes less
liability on Seller than such Settlement would have imposed).
(iii) With respect to any taxable period of any Subsidiary
beginning before and ending after the Closing Date, Buyer and
Seller shall jointly control the defense and settlement of any
Tax audit or administrative or court proceeding, and each
party shall cooperate with the other party at its own expense
and there shall be no settlement or closing or other agreement
with respect thereto without the consent of the other party,
which consent will not be unreasonably withheld; provided,
however, that if either party shall refuse to consent to any
settlement, closing or other agreement that the other party
proposed to accept (a "Proposed Settlement"), then (A) the
liability with respect to the subject matter of the Proposed
Settlement of the party who proposed to accept the Proposed
Settlement shall be limited to the amount that such liability
would have been if the Proposed Settlement had been accepted
and (B) the other party shall have the right thereafter to
control the defense and settlement of such Tax audit or
proceeding (it being understood that the other party shall be
responsible for all expenses incurred thereafter in connection
with the contest of such Tax audit or proceeding except to the
extent that the final settlement imposes less liability on the
party who proposed to accept the Proposed Settlement than the
Proposed Settlement would have imposed).
(e) Tax Returns. (i) Buyer shall properly prepare or
cause to be properly prepared, and shall timely file or cause
to be timely filed, all income Tax Returns which include any
Subsidiary or their respective assets or operations for all
taxable periods of the Subsidiaries ending on or before the
Closing Date and for which the due date for filing is after
the Closing Date (which income Tax Returns shall include the
Subsidiaries and the reportable items from the assets or
operations of the Subsidiaries through and including the
Closing Date). Such income Tax Returns (insofar as they
relate to any Subsidiary) shall be prepared in a manner
consistent with past practices, and Buyer shall pay or cause
to be paid all income Taxes shown as due on such Tax Returns
after application of all estimated tax payments previously
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made with respect thereto. Such income Tax Returns (or the
portions thereof that relate to any Subsidiary) shall be
provided to Seller for Seller's review and comment 30 days
prior to filing, and Seller shall be entitled to suggest to
Buyer any reasonable changes to such income Tax Returns.
Seller and Buyer agree to consult and resolve in good faith
any issue arising as a result of the review of such income Tax
Returns and mutually to consent to the filing as promptly as
possible of such income Tax Returns. In the event the parties
are unable to resolve any dispute within fifteen days
following the delivery of such income Tax Returns, the parties
shall jointly request the Auditor to resolve any issue at
least ten days before the due date of any such income Tax
Return, in order that such Tax Return may be timely filed. In
deciding the resolution of the dispute, the Auditor shall be
instructed to give deference to the position advocated by
Seller, provided such position is in accordance with
applicable standards relating to the practice of certified
public accountants generally and is not inconsistent with
Seller's past practices. If the Auditor is unable to make a
determination with respect to any disputed issue within five
business days prior to the due date (including extensions) for
the filing of the income Tax Return in question, then such
income Tax Return shall be filed in the form advocated by
Seller prior to such due date without such determination
having been made. Notwithstanding the filing of such Tax
Return, the Auditor shall make a determination with respect to
any disputed issue, and an amended return shall be filed if
necessary to reflect the Auditor's determination. The fees
and expenses of the Auditor shall be allocated between Buyer
and Seller proportionately in accordance with the formula set
forth in Section 1.3(c). Buyer shall, subsequent to the
Closing Date, provide written notice to Seller of the filing
of any amended income Tax Return or claim for refund with
respect to any taxable period ending on or prior to the
Closing Date; and if any such filing could reasonably be
expected to have a material adverse effect on the condition of
Seller, or its respective subsidiaries, for any taxable period
ending after the Closing Date, Buyer shall not make such
filing without the consent of Seller, which consent will not
be unreasonably withheld. Nothing in this Section 6.1(e)(i)
shall excuse Seller from its indemnification obligations
pursuant to Section 6.1(a) hereof if the amount of income
Taxes as ultimately determined (on audit or otherwise), for
the periods covered by such Tax Returns exceeds the amount
determined under this Section 6.1(e)(i).
(ii) Subject to clause (iii) below, Buyer shall be
responsible for preparing and filing all other Tax Returns
required to be filed after the Closing Date by or on behalf of
the Subsidiaries, or with respect to their respective assets
and operations.
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(iii) With respect to any income Tax Return required to be
filed by Buyer for a taxable period of any Subsidiary
beginning before the Closing Date and ending after the Closing
Date, Buyer shall deliver, at least 30 days prior to the due
date for filing such Tax Return (including extensions), to
Seller a statement setting forth the amount of Tax allocated
to the Pre-Closing Straddle Period pursuant to Section 6.1(c)
(the "Tax Statement") and copies of such income Tax Returns,
and, without prejudice to the provisions of this Section 6.1,
Buyer shall cause the Subsidiaries to pay all income Taxes
shown as due on such income Tax Returns. Seller shall have
the right to review such income Tax Returns and the Tax
Statement prior to the filing of such income Tax Returns and
to suggest to Buyer any reasonable changes to such income Tax
Returns. Seller and Buyer agree to consult and resolve in
good faith any issue arising as a result of the review of such
income Tax Returns and the Tax Statement and mutually to
consent to the filing as promptly as possible of such income
Tax Returns. In the event the parties are unable to resolve
any dispute within fifteen days following the delivery of such
income Tax Returns and the Tax Statement, the parties shall
jointly request the Auditor to resolve any issue in dispute as
promptly as possible. If the Auditor is unable to make a
determination with respect to any disputed issue within five
business days prior to the due date (including extensions) for
the filing of the income Tax Return in question, then Buyer
may file such income Tax Return on the due date (including
extensions) therefor without such determination having been
made and without Seller's consent. Notwithstanding the filing
of such income Tax Return, the Auditor shall make a
determination with respect to any disputed issue, and the
amount of income Taxes that are allocated to the Pre-Closing
Straddle Period pursuant to Section 6.1(c) shall be as
determined by the Auditor. In addition, an amended return
shall be filed if necessary to reflect the Auditor's
determination. The fees and expenses of the Auditor shall be
allocated between Buyer and Seller in accordance with the
formula set forth in Section 1.3(c). Nothing in this Section
6.1(e)(iii) shall excuse Seller from its indemnification
obligations pursuant to Section 6.1(a) hereof if the amount of
income Taxes as ultimately determined (on audit or otherwise),
for the periods covered by such income Tax Returns and which
are allocable to the Pre-Closing Straddle Period pursuant to
Section 6.1(c), exceeds the amount determined under this
Section 6.1(e)(iii); provided, that Seller's obligation to
make any payments with respect to income Taxes governed by
this clause (iii) shall be solely governed by Section
6.1(a)(i).
(iv) The review and dispute resolution procedures
described in subparagraph (e)(iii) above shall also be
followed with respect to any Tax Return pertaining to other
Taxes required to be prepared and filed by Buyer after the
Closing Date and which show other Taxes due relating to the
Pre-Closing Straddle Period or any other taxable period ending
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on or before the Closing Date; provided, however, Seller's
obligation to make any payments with respect to such other
Taxes shall be solely governed by Section 6.1(a)(i).
(v) Seller and Buyer shall cooperate fully with each
other and make available to each other in a timely fashion
such Tax data and other information as may be reasonably
required by Seller or Buyer for the preparation and timely
filing of any Tax Returns required to be prepared and filed by
Seller or Buyer hereunder, or in connection with the
preparation or filing of any election, claim for refund,
consent or certification.
(vi) Seller hereby acknowledges that Buyer may, in its
discretion, make an election under Section 338(g) of the Code
with respect to any or all of the Stock.
(f) Access to Tax Data. Seller and Buyer shall provide
to each other, and Buyer shall cause each of the Subsidiaries to
provide access to Seller at any reasonable time upon reasonable
prior written notice and from time to time, at the business
location at which the books and records are maintained, after the
Closing Date, to such Tax data of each of the Subsidiaries as
Seller or Buyer as the case may be, may from time to time
reasonably request and will furnish, and request the independent
accountants and legal counsel of Seller, Buyer or any Subsidiary to
furnish to Seller or Buyer, as the case may be, such additional Tax
and other information and documents in the possession of such
persons as Seller or Buyer may from time to time reasonably
request.
(g) Limitations on Claims for Indemnity. Any claim for
indemnity hereunder may be made at any time prior to 60 days after
the expiration of the applicable Tax statute of limitations with
respect to the relevant taxable period (including all periods of
extension, whether automatic or permissive).
(h) Indemnification Procedures. Any party seeking
indemnification under Section 6.1 shall give the indemnifying party
written notice of claim for indemnification or payment, which
notice shall include a calculation of the amount of the requested
indemnity or other payment and shall furnish to the indemnifying
party copies of or provide reasonable access to all books, records
and other information reasonably requested by such party to the
extent necessary to substantiate such claim and verify the amount
thereof. If reasonably necessary in order to make or substantiate
a claim (or to determine if a claim should be made), the
indemnifying party shall be permitted access to the indemnified
party's books, records and other information in connection
therewith. The indemnifying party shall deliver to the indemnified
party, within 30 days after receiving both the foregoing notice and
copies of or reasonable access to all books, records and other
information reasonably requested by it, a detailed statement
describing its objections (if any) thereto. The parties shall use
reasonable efforts to resolve any such objections, but if they do
not obtain a final resolution within 30 days (or any longer period
mutually agreed to by the parties) after the indemnified party has
received the statement of objections, the Auditor shall resolve any
remaining objections. The fees and expenses of the Auditor shall
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be allocated between Buyer and Seller proportionately in accordance
with the formula set forth in Section 1.3(c).
(i) Prohibition on Certain Transactions After the
Closing Date. Buyer agrees to cause each of the Subsidiaries to
refrain from engaging in any transaction following the Closing that
is outside of the ordinary course of business if such transaction
would have an adverse effect on the United States federal income
Tax liability of the Seller's consolidated group or any other Tax
liability for which Seller is responsible pursuant to Section
6.1(a).
(j) Certain Taxes Deemed Paid. For all purposes of this
Agreement, each Subsidiary shall be considered to have paid prior
to the Closing Date any Taxes covered by Section 6.1(a) to the
extent of any estimated Tax payments made by such company or on
behalf of such company prior to the Closing Date with respect to
such Taxes.
6.2 Tax Related Adjustments. (a) Indemnity Payments as
Adjustment to Purchase Price. Seller and Buyer agree that, to the
extent permitted by law, any indemnity payment made under this
Agreement (including, without limitation, under this Article VI or
under Article VIII hereof) will be treated by the parties as an
adjustment to the Purchase Price. If, notwithstanding such
treatment by the parties, any indemnity payment made under this
Agreement (including, without limitation, under this Article VI or
under Article VIII hereof) is determined to be taxable to the
indemnified party by any Taxing Authority, then the indemnifying
party shall indemnify the indemnified party for any Taxes payable
by it by reason of the receipt of such indemnity payment (including
any payments under this Section 6.2), determined at an assumed
marginal tax rate equal to the highest marginal tax rate then in
effect for corporate taxpayers in the relevant jurisdiction.
(b) Adjustment to Indemnity Payment. Notwithstanding
anything to the contrary in Article VIII hereof, any indemnity
payment otherwise due and payable under this Agreement (including,
without limitation, under this Article VI or under Article VIII
hereof) shall be decreased (but not below zero) to the extent of
any net reduction in Taxes payable by the indemnified party or any
of its subsidiaries as a result of its receipt of any such
indemnity payment or as a result of or in connection with the loss
giving rise to the claim for indemnification, determined at an
assumed marginal tax rate equal to the highest marginal tax rate
then in effect for corporate taxpayers in the relevant
jurisdiction.
(c) Refunds and Credits Payable to Seller. Except as
provided in Section 6.2(d), Buyer shall pay to Seller any refund or
credit of any Taxes covered by Section 6.1(a) (including, for this
purpose, the amount by which any Taxes included in the accrual
established therefor on the Final Statement of Assets and
Liabilities are refunded or subsequently determined to not be
payable). In addition, Buyer shall pay to Seller the amount of any
actual reduction in Taxes realized by Buyer or any of its
subsidiaries (including any Subsidiary) with respect to any period
(or portion thereof) beginning after the Closing Date that relates
to an audit adjustment or Taxes imposed on or with respect to
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Seller or its subsidiaries (including any Subsidiary) with respect
to any taxable period (or portion thereof) ending on or prior to
the Closing Date. Buyer shall pay to Seller such refund or credit
plus any interest received thereon (reduced by any actual Tax
increase or actual Tax detriment to Buyer or any Subsidiary) or the
amount of any such reduction in Taxes promptly upon receipt thereof
by the recipient thereof. Buyer shall, if Seller requests, cause
the relevant entity to file for and obtain any refunds or
equivalent amounts to which Seller is entitled under this Section
6.2(c); provided, however, that Buyer must consent to any such
refund claim, which consent may not be unreasonably withheld, and
that any such refund claim shall be at the sole expense of Seller.
(d) Carryback of any Tax Attribute. In the event that
any Subsidiary realizes any Tax attribute after the Closing Date
that must be carried back to a taxable period ending on or prior to
the Closing Date, such carryback shall be made only with Seller's
written consent; provided, that Seller shall consent to such
carryback, shall cooperate in the filing of any required returns or
claims for refund and shall pay Buyer any Tax refund received or
the amount of reduction in Taxes so obtained (net of any tax cost
incurred) if Seller, in its sole discretion, determines that
permitting such carryback or filing such returns or claims will not
adversely affect Seller or its subsidiaries.
6.3 Transfer Taxes. Buyer and Seller shall share
equally all transfer taxes or fees, sales taxes, value added taxes,
recordation or similar taxes or fees, deed, stamp or other taxes,
duties, recording charges, fees, or other similar cost or expense
of any kind required in connection with the effectuation of the
transactions and documentation contemplated by this Agreement
(whether such tax, duties or fee, cost or expense is imposed on
Buyer, Seller or any subsidiary of Buyer or Seller). The parties
shall cooperate in the preparation and review (including, without
limitation, the resolution of any dispute in the same manner as
provided for in Section 6.1(e) of this Agreement) of all Tax
Returns required to be filed in respect of any Transfer Taxes to be
paid pursuant to this Section 6.3.
6.4 Allocation of Purchase Price. The parties will
allocate the Purchase Price prior to Closing based upon a mutually
satisfactory valuation analysis to be jointly prepared by the
parties prior to the Closing. The parties acknowledge that, based
upon the limited analysis performed prior to the date of this
Agreement, the parties have no reason to believe that the
allocation of 50% of the Purchase Price to the stock of Bard
Galway, Bard Ireland and Bard Connaught would be unreasonable.
Notwithstanding the foregoing, the allocation of the Purchase Price
among assets sold by Seller or a U.S. subsidiary of Seller, shall
be prepared in accordance with the rules under Section 1060 of the
Code, and the Treasury Regulations promulgated thereunder);
provided, however, in the event of any adjustment to the Purchase
Price pursuant to this Agreement (i) Seller shall promptly prepare
and furnish to Buyer an amendment to such allocation, (ii) Buyer
may promptly, but in no event later than 10 days after receipt of
such amendment, comment on the amendment and (iii) Seller shall
incorporate any comments of Buyer timely received by Seller into
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the amendment which do not adversely affect Seller's liability for
Taxes or Tax position in any material respect. Seller and Buyer
agree to act in accordance with the computations and allocations
resulting from the procedures set forth in this Section 6.4
(including, without limitation, any modifications pursuant to the
proviso immediately preceding this sentence) in any relevant Tax
Returns or filings, including, without limitation, any forms or
reports required to be filed pursuant to Section 1060 of the Code,
the Treasury Regulations promulgated thereunder or any provisions
of local, state and foreign law ("1060 Forms"), and to cooperate in
the preparation of any 1060 Forms and to file such 1060 Forms in
the manner required by applicable law.
6.5 Tax Matters Governed by Article VI. It is the
intention of the parties that Buyer's rights against Seller and
Seller's rights against Buyer with respect to Taxes shall be
governed by this Article VI and not Article VIII except as
specifically provided in Section 8.3.
ARTICLE VII
LABOR MATTERS, EMPLOYEE RELATIONS AND BENEFITS
7.1 Transferred Employees. On the Closing Date, Buyer
will offer employment to each of the employees of the Business
listed in Schedule 7.1 who is not an employee of a Subsidiary and
remains an employee of the Business as of the Closing Date (the
"Scheduled Employees") at the same job in all material respects, at
the same location and at the same salary as such employee had prior
to the Closing Date, and such employees who accept such offer,
together with the employees of each Subsidiary as of the Closing
Date, shall hereinafter be referred to collectively as "Transferred
Employees." With respect to any Scheduled Employee who declines
Buyer's offer of employment on the Closing Date, Seller shall
retain liability for any severance payments or severance benefits
to which such Scheduled Employee is entitled under Seller's
employee benefit plans, programs and practices, whether or not a
Benefit Plan, so long as the offer declined by such employee was
for the same job in all material respects, at the same location and
for the same salary as such Employee had prior to the Closing Date.
7.2 Benefits for Transferred Employees. Except as
hereinafter provided, Buyer shall provide Transferred Employees
with such compensation and employee benefits as it provides to
similarly situated employees and, except as may be required by
applicable law, shall have no obligation to maintain the
compensation and employee benefits, either as to amount or type,
that were provided to such Transferred Employees prior to the
Closing Date. For purposes of eligibility and vesting under
employee pension and welfare benefit plans of Buyer, Transferred
Employees shall be credited with their service with the Business
and with any Subsidiary ("Transferred Service"). Transferred
Service shall also apply with respect to such other aspects of
employment compensation as vacation entitlement and seniority.
Buyer shall pay or contribute as soon as practicable (in light of,
among other things, ERISA and tax matters) following the Closing
Date the sum of $1.5 million to be allocated directly to or on
behalf of those Transferred Employees who, as of the Closing, were
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participants in the Employees' Retirement Plan of X.X. Xxxx, Inc.
(the "Bard U.S. Pension Plan"). Buyer and Seller shall negotiate
in good faith an arrangement pursuant to which such contribution
will be allocated among such Transferred Employees. From the
Closing Date through the end of 1998, Buyer shall continue to
provide the same level of medical and other health plan coverage
for Transferred Employees in the United States at a cost for such
employees that requires a level of employee contributions no
greater than that required for such coverage immediately prior to
the Closing Date. After the date hereof and prior to the Closing
Date, Seller shall give Buyer reasonable access to the Scheduled
Employees and employees of the Subsidiaries and Buyer shall use
such access to determine the persons to whom stock options of Buyer
will be granted and the size of such grants in order to make such
grants, if any, as soon as practicable after the Closing Date.
Buyer shall not be under any obligation to make any such grants.
7.3 Severance Policy and Other Agreements. (a) Minimum
Severance for Certain Transferred Employees. Any Transferred
Employee who, as of the Closing Date, was covered by the X.X. Xxxx,
Inc. Xxxxxxxxx Plan (the "Seller Severance Plan") and whose
employment with Buyer is terminated by Buyer or any subsidiary or
affiliate of Buyer for other than cause (as such term is defined in
the Seller Severance Plan) during the one-year period following the
Closing Date shall be deemed to have a "Covered Termination" (as
defined in the Seller Severance Plan) and shall be entitled to
receive a severance benefit from Buyer no less than the amount to
which such employee would be entitled under the terms and
conditions of the Seller Severance Plan as in effect on the date of
this Agreement in lieu of any other severance or similar benefit.
(b) Severance/Employment Agreements of Transferred
Employees. Buyer shall honor or cause to be honored all severance
agreements and employment agreements with individual Transferred
Employees as in effect on the date of this Agreement; provided,
that Buyer shall not be obligated to honor or cause to be honored
any such agreement except to the extent such agreement was
disclosed in the Schedules or a copy thereof was provided or
otherwise made available to Buyer prior to the date hereof.
7.4 1998 Bonus. As soon as practicable (but in no event
more than 30 days after) the Closing Date, Buyer will cause bonuses
to be paid under any applicable bonus plan of Seller or any of its
subsidiaries, as in effect on the date hereof, to the Transferred
Employee participating thereunder in an amount equal to the pro
rata portion of the target bonus to which such employee would have
been entitled, based on the portion of the 1998 fiscal year
completed prior to the Closing Date, assuming the target bonus had
been achieved in respect of such fiscal year; provided, that Seller
shall reimburse Buyer any amount by which such bonuses, in the
aggregate, exceed the aggregate amount for such bonuses reflected
as liabilities on the Final Closing Statement of Assets and
Liabilities.
7.5 Credit for Deductibles. Buyer will, or will cause
the Subsidiaries to, following the Closing Date, (i) waive all
limitations as to preexisting conditions, exclusions and waiting
periods with respect to participation and coverage requirements
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applicable to Transferred Employees under any welfare plan that
such employees may be eligible to participate in after the Closing
Date and (ii) provide each Transferred Employee with credit for any
co-payments and deductibles paid prior to the Closing Date in
satisfying any applicable deductible or out-of-pocket requirements
under any welfare plans that such employees are eligible to
participate in after the Closing Date.
7.6 Seller Plans. (a) Defined Contribution Plans. (i)
As of the Closing Date, Seller shall cause the active participation
by Transferred Employees in the Employees' Retirement Savings Plan
of X. X. Xxxx, Inc. (the "Seller's Savings Plan") to cease. Seller
shall (A) as of the Closing Date cause the trustees of the Seller's
Savings Plan to identify, in accordance with the applicable spinoff
provisions set forth under Section 414(l) of the Code, the assets
of the Seller's Savings Plan representing the full account balances
of Transferred Employees for all periods of participation through
the Closing Date (including, as applicable, all employee
contributions, employer contributions and all earnings attributable
thereto); and (B) as soon as practicable after the Closing Date,
make all required filings and submissions to appropriate
governmental authorities and all required amendments to the
Seller's Savings Plan and related trust agreements necessary to
provide for the transfer of assets described in this Section
7.6(a). The Seller's Savings Plan shall be amended to provide that
(A) there shall be no contributions thereto with respect to the
Transferred Employees for periods after the Closing Date and (B)
all Transferred Employee account balances shall be fully vested.
Buyer shall (A) give Seller written notice of the name of the
trustee of the defined contribution plan designated by Buyer to
which the assets and liabilities for benefits of the Seller's
Savings Plan are to be transferred (the "Buyer's Savings Plan"),
accompanied by a copy of the most recent favorable IRS
determination letter for such plan received by Buyer, as promptly
as possible after the Closing Date, but in any event prior to the
date on which such transfer is to occur and (B) as soon as
practicable after the Closing Date, make all required filings and
submissions to appropriate governmental authorities. As soon as
practicable after the Savings Transfer Date, Seller shall cause the
trustees of the Seller's Savings Plan to transfer to the trustee of
the Buyer's Savings Plan the following amount (the "Savings Total
Transfer Amount"): (A) the full account balances (in cash and
notes for any loans to Transferred Employees) of all Transferred
Employees, whose account balances shall have been credited with
appropriate earnings and contributions, if any, attributable to the
period ending at the close of business on the Closing Date, plus
(B) earnings on such account balances attributable to the period
from the Closing Date to the Savings Transfer Date reduced by (C)
any benefit or withdrawal payments in respect of Transferred
Employees prior to the Savings Transfer Date. Seller shall certify
that all participant loans transferred from Seller's Savings Plan
are current as to payments of principal and interest except as
disclosed on a schedule delivered to Buyer at the time of such
transfer. The "Savings Transfer Date" shall be as soon as
practicable after the foregoing requirements have been met. In
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consideration of the transfer of assets hereunder, Buyer shall, as
of the Savings Transfer Date, cause the Buyer's Savings Plan to
assume the liabilities for benefits payable to plan participants
and beneficiaries in respect of participants for whom assets
(including notes) are transferred (it being understood that Buyer's
Savings Plan shall not assume any liability in respect of fiduciary
duties under Seller's Savings Plan). With respect to any Benefit
Plan in any jurisdiction other than the United States that is a
defined contribution-type plan from which assets are to be
transferred to the Buyer, the principles established in this
Section 7.6(a) shall be followed, subject to applicable law.
(b) Defined Benefit Plan. As of the Closing Date,
Transferred Employees shall cease to accrue service credit or
benefits under the Employees' Retirement Plan of X. X. Xxxx, Inc.
(the "Seller's Defined Benefit Plan"). Transferred Employees'
rights to benefits under the Seller's Defined Benefit Plan shall be
determined in accordance with the terms of such Defined Benefit
Plan, and no assets or liabilities will be transferred therefrom.
Seller shall retain all liabilities with respect to Seller's
Defined Benefit Plan.
(c) Other Plans. Except as otherwise provided herein,
from and after the Closing Date, Buyer shall have no obligation to
assume or to cause the Subsidiaries to continue or assume any
liabilities, including, without limitation, any employee benefits
or compensation liabilities, relating to the Transferred Employees,
including, but not limited to, liabilities under any Benefit Plan,
employment, severance or other similar contract, arrangement or
policy or any plan or arrangement providing for insurance coverage
(including, without limitation, any self-insured arrangements),
workers' compensation, short-term disability, long-term disability,
supplemental unemployment benefits, vacation benefits, retirement
benefits, retiree welfare benefits, salary, deferred compensation,
profit-sharing, bonuses or other forms of incentive compensation or
post-retirement insurance, compensation or benefits (regardless of
whether such benefits are provided pursuant to a welfare plan).
Without limiting the generality of the foregoing, Seller shall
retain (i) all liabilities in connection with the Seller's Defined
Benefit Plan, (ii) all liabilities under the Seller's Severance
Plan except as specifically set forth in Section 7.3(a) and (iii)
all liabilities under the Seller's Savings Plan, other than benefit
liabilities with respect to participants who are Transferred
Employees (but only on and after the Savings Transfer Date).
7.7 Employee Notification Requirements. (a) Prohibit
Actions Implicating WARN or Analogous Laws. Prior to the Closing
Date, Seller shall not, without Buyer's consent, (i) effect any
"plant closing" or "mass layoff", as such terms are defined in
WARN, or any partial closing to the extent a partial closing would
result in Liability under WARN or (ii) effect any dismissals or
"collective dismissals" or other analogous program of employment
terminations to the extent such actions would implicate foreign
laws analogous to WARN, (including, without limitation, any
regulations, statutes, rules or orders implementing such directives
or acts (collectively, the "Directives")). Similarly, neither
Buyer nor any Subsidiary shall, without the consent of Seller, (i)
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at any time prior to 90 days after the Closing Date, effectuate a
"plant closing", or "mass layoff" as such terms are defined in WARN
or (ii) effect any Directive.
(b) WARN and Other Notifications. Seller is not aware
of any plans on the part of the Buyer to carry out within 60 days
of the Closing a plant closing or mass layoff within the meaning of
WARN with respect to the Business. The Buyer is and shall be
responsible for giving any notice to Transferred Employees or
governmental entities required under WARN or any analogous state,
local or foreign law in connection with or as result of the
transactions contemplated by this Agreement. Buyer agrees to
cooperate with Seller to enable Seller to comply with any
notification and consultation requirements arising from the sale of
the Business as may be required by labor laws and agreements
governing non-United States employees of the Seller and/or its
subsidiaries (including, without limitation, any notification to
and consultation obligations with the European Communications
Network).
(c) Terminations in Compliance with Foreign Laws. Buyer
agrees to take such action as is necessary to insure that any
employment terminations that may be effected on or after the
Closing in connection with the transactions contemplated by this
Agreement comply with the labor laws and agreements covering
Non-United States Employees, including without limitation, the
Directives.
7.8 No Third Party Beneficiaries. Nothing contained in
this Article VII shall confer upon any of the current or former
employees of Seller, Buyer or any of their subsidiaries, any rights
or remedies of any kind whatsoever under or by reason of this
Agreement (including, without limitation, any right to employment
or continued employment for a specific period, or any right to a
particular benefit).
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. (a) Buyer's Indemnification
Obligations. On and after the Closing Date, Buyer hereby agrees to
indemnify, defend and hold harmless Seller and each of its
directors, officers, employees, subsidiaries and other affiliates
(other than the Subsidiaries) and representatives (collectively,
the "Seller Indemnified Parties", which, for purposes of Section
8.3, shall be deemed to refer to Seller and its subsidiaries as
indemnified parties under Article VI hereof) from and against, and
will pay to the Seller Indemnified Parties the amount of, any and
all claims, losses, damages, costs, expenses, obligations,
liabilities, charges, actions, suits, proceedings, deficiencies,
interest, penalties and fines (including, without limitation, costs
of collection, attorney's fees and other costs of defense, removal
costs, remediation costs, closure costs and expenses of
investigation and ongoing monitoring) or diminution in value,
whether or not involving a third party claim (collectively,
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"Damages") imposed on, sustained, incurred or suffered by or
asserted against them in respect of, but only in respect of:
(i) any breach of Buyer's representations and warranties
in this Agreement, including, without limitation,
representations and warranties of Buyer contained in any
certificate delivered by Buyer at the Closing pursuant to the
terms of Section 5.3(c) hereof; provided, that subject to
Section 8.5 hereof, any indemnification claim under this
Section 8.1(a)(i) must be made within the period of
survivability set forth in Section 3.3;
(ii) Buyer's failure, or the failure of any subsidiary of
Buyer, to perform or otherwise fulfill any of its agreements,
covenants, obligations or undertakings hereunder or under any
of the Ancillary Agreements or under any document delivered by
Buyer or any of its Designees pursuant to the terms of Section
2.3;
(iii) the Assumed Liabilities;
(iv) any property damage, personal injury, death, product
recall, product return or other similar Liability arising out
of products that are manufactured or distributed by Buyer or
any of its subsidiaries or other affiliates subsequent to the
Closing Date (other than to the extent arising out of or
resulting from the manufacture, shipment, storage, handling or
labelling (or any acts or omissions in respect thereof) of
such products by Seller or any of its affiliates or any of
their direct or indirect distributors or agents prior to the
Closing Date), whether in respect of any express or implied
representation or warranty or otherwise; and
(v) statutory liability of Seller or any of its
subsidiaries arising from the termination or modification by
Buyer or its subsidiaries after the Closing of product
distribution arrangements under distribution contracts that
are Assets or contracts of Subsidiaries.
(b) Seller's Indemnification Obligations. On and after
the Closing Date, Seller hereby agrees to indemnify, defend and
hold harmless Buyer and each of its directors, officers, employees,
subsidiaries and other affiliates (including the Subsidiaries) and
representatives (collectively, the "Buyer Indemnified Parties",
which, for purposes of Section 8.3, shall be deemed to refer to
Buyer and its subsidiaries (including the Subsidiaries) as
indemnified parties under Article VI hereof), from and against, and
will pay to the Buyer Indemnified Parties the amount of, any and
all Damages imposed on, sustained, incurred or suffered by or
asserted against them in respect of, but only in respect of:
(i) any breach of Seller's representations and
warranties (except for a breach of the representations and
warranties contained in Section 3.1(i), it being the intention
of the parties that Buyer's rights against Seller with respect
to Taxes shall be governed by Article VI and not this Article
VIII except as specifically provided in Section 8.3) in this
Agreement (it being understood that, for purposes of
determining the truth and correctness of such representations
and warranties, all Material Adverse Effect and materiality
qualifiers (including the dollar thresholds and other
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materiality qualifiers incorporated in the definition of
Business Contract) contained in such representations and
warranties shall be disregarded), including, without
limitation, representations and warranties of Seller contained
in any certificate delivered by Seller at the Closing pursuant
to the terms of Section 5.2(c) hereof (but disregarding any
materiality qualification in any such certificate); provided,
that subject to Section 8.5, any indemnification claim under
this Section 8.1(b)(i) must be made within the period of
survivability set forth in Section 3.3;
(ii) Seller's failure, or the failure of any subsidiary
of Seller, to perform or otherwise fulfill any of its
agreements, covenants, obligations or undertakings hereunder
or under any of the Ancillary Agreements or under any document
delivered by Seller or any of its subsidiaries pursuant to the
terms of Section 2.2;
(iii) all Liabilities of Seller and its subsidiaries
(other than the Subsidiaries) other than the Assumed
Liabilities;
(iv) any property damage, personal injury, death, product
recall, product return or other similar Liability arising out
of products manufactured or distributed prior to the Closing
Date (other than to the extent arising out of or resulting
from the shipment, storage, handling or labelling (or any acts
or omissions in respect thereof) of such products by Buyer,
any of its affiliates or any of their direct or indirect
distributors or agents after the Closing Date), whether in
respect of any express or implied representation or warranty
or otherwise; provided, that (without limiting any other
Damages that may be recovered under this Section 8.1(b)(iv)),
the Damages that can be recovered by Buyer from Seller under
this Section 8.1(b)(iv) as a result of the return of such
products of the Business after the Closing for credit or
replacement shall be limited to the lesser of (a) replacement
cost and (b) $225,000;
(v) any Environmental Laws in respect of any condition
existing on the Closing Date that constitutes a violation of
any Environmental Law or that would require under
Environmental Laws any investigation, cleanup, remediation or
removal actions with respect to the presence of Hazardous
Materials; and
(vi) the Liabilities assumed by Seller or its Designees
pursuant to Section 4.18.
(c) Indemnified Liabilities. All such Damages described
in the foregoing paragraphs (a) and (b) are collectively referred
to as "Indemnified Liabilities."
(d) Environmental Matters. With respect to any
Indemnified Liabilities arising under Section 8.1(b)(i) out of a
breach of the representation set forth in Section 3.1(s) hereof or
Section 8.1(b)(v):
(i) Buyer shall, and shall cause any applicable
Subsidiary to, cooperate with any reasonable request by Seller
to enable Seller to perform its obligations under this Article
VIII with respect to such Indemnified Liabilities;
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(ii) Buyer shall promptly after it has knowledge thereof
notify Seller of the existence of any Indemnified Liabilities,
but failure to so notify Seller promptly shall not relieve
Seller of any of its obligations hereunder in the absence of
actual prejudice and then only to the extent such actual
prejudice is caused by such failure to so notify Seller; and
(iii) notwithstanding any other provision of this
Agreement to the contrary, Damages relating to any
environmental investigation, monitoring or remediation
(collectively, "Remedial Actions") that would otherwise
constitute Indemnified Liabilities shall be subject to
indemnification only to the extent that: (i) the Remedial
Action is required by a governmental entity pursuant to
Environmental Laws and (ii) the Remedial Action is performed
in a reasonably cost-effective manner considering the totality
of the circumstances.
8.2 Procedure. If any of the persons to be indemnified
under this Article VIII has suffered or incurred any Damages with
respect to which indemnification is to be sought hereunder, the
indemnified party shall so notify the party from whom
indemnification is sought promptly in writing describing such
Damages, the amount or estimated amount thereof, if known or
reasonably capable of estimation, and the method of computation of
such Damages. If a claim or demand by a third party is made
against an indemnified party or any action at law or suit in equity
is instituted against an indemnified party by a third party (each
claim, demand, action or suit by a third party, a "Third Party
Claim"), and if an indemnified party intends to seek indemnity with
respect thereto under this Article VIII, such indemnified party
shall promptly notify the indemnifying party in writing of such
Third Party Claim setting forth such Third Party Claim in
reasonable detail and tender to the indemnifying party the defense
of such Third Party Claim. The failure of the indemnified party to
give the indemnifying party prompt notice, to provide notice in the
form required or tender the defense of a Third Party Claim as
provided herein shall not relieve the indemnifying party of any of
its obligations under this Article VIII, except to the extent that
the indemnifying party is materially prejudiced by such failure.
For 30 days after receipt of such notice the indemnifying party
shall have the right but not the obligation to undertake the
conduct and control, through counsel of its own choosing and at its
own expense, of the settlement or defense of any Third Party Claim,
and the indemnified party shall cooperate with the indemnifying
party in connection therewith; provided, that if the indemnifying
party elects to undertake the conduct and control of such
settlement or defense, then the indemnified party may participate
in such settlement or defense through counsel chosen by such
indemnified party provided that the fees and expenses of such
counsel shall be borne by such indemnified party; provided,
further, that pending the indemnifying party's decision whether to
exercise its right to undertake the conduct and control of the
settlement or defense of any Third Party Claim, the indemnified
party shall undertake, conduct and control the settlement or
defense thereof, through counsel of its own choosing. So long as
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the indemnifying party is reasonably contesting any such claim in
good faith, the indemnified party shall not pay or settle any such
Third Party Claim. Notwithstanding the foregoing, the indemnified
party shall have the right to pay or settle any such Third Party
Claim; provided, that in such event it shall waive any right to
indemnity therefor by the indemnifying party. If the indemnifying
party does not notify the indemnified party within 30 days after
the receipt of the indemnified party's notice of a claim of
indemnity hereunder in connection with a Third Party Claim that it
elects to undertake the settlement or defense thereof, the
indemnified party shall have the right to conduct and control the
defense thereof and to contest, settle or compromise the Third
Party Claim but shall not thereby waive any right to indemnity
therefor pursuant to this Agreement. If the indemnifying party
assumes the defense of a Third Party Claim in accordance with this
Section 8.2 and on the date 60 days after the indemnifying party
received notice of such Third Party Claim it continues its defense
thereof with respect to any or all claims made in such Third Party
Claim, then it will be deemed conclusively established for purposes
of this Agreement that all claims are within the scope of and are
subject to the indemnification provisions of this Article VIII, and
the indemnifying party shall not be permitted to contest the
applicability of Article VIII to such Third Party Claim or to
contest the indemnifying party's obligation to provide
indemnification with respect thereto. The indemnifying party shall
not, except with the consent of the indemnified party, enter into
any settlement or consent to entry of any judgment unless: (i)
such settlement or judgment includes as an unconditional term
thereof the giving by the person or persons asserting such claim to
all indemnified parties (i.e., Seller Indemnified Party or Buyer
Indemnified Party, as the case may be) an unconditional release
from all liability with respect to such claim and (ii) the relief
provided in connection with such settlement or judgment effected by
the indemnifying party is satisfied entirely by the indemnifying
party.
8.3 Limitation on Indemnification. (a) Indemnification
Threshold. Seller shall be required to indemnify, defend and hold
harmless the Buyer Indemnified Parties under Section 6.1(a) and
Section 8.1(b)(i) with respect to Damages incurred by such
indemnified party in accordance with Section 6.1(a) and Section
8.1(b)(i) only to the extent that the aggregate amount of all such
Damages of the Buyer Indemnified Parties exceeds $7,500,000.
(b) Certain Special, Indirect, Incidental, Consequential
and Related Damages not Indemnifiable. In no event shall Seller or
Buyer, as the case may be, be liable to Buyer Indemnified Parties
or Seller Indemnified Parties, respectively, for special, indirect,
incidental or consequential damages that are not reasonably
foreseeable.
(c) Indemnity Payments Reduced by Insurance Proceeds.
Any indemnity payment payable pursuant to this Agreement
(including, without limitation, under this Article VIII or under
Article VI hereof) shall be decreased to the extent of any
insurance proceeds received by the Buyer Indemnified Party or the
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Seller Indemnified Party, as the case may be, in respect of the
Damages giving rise to such indemnity payment.
(d) Limitation on Liability. In no event shall the
aggregate liability of Seller and its subsidiaries under Section
6.1(a) and Article VIII exceed the Purchase Price, as such price
may be adjusted in accordance with the terms hereof.
8.4 Exclusive Remedy. Each of Seller and Buyer
acknowledges and agrees that, from and after the Closing (except as
provided in Section 9.9 hereof), its sole and exclusive remedy with
respect to any and all claims against the other party relating to
the subject matter of this Agreement (other than the Ancillary
Agreements) shall be pursuant to the indemnification provisions set
forth in this Article VIII (except for claims relating to Taxes,
which shall be governed by Article VI except as specifically
provided in Section 8.3) or as otherwise provided hereunder;
provided, however, that there shall be no limitation on the right
to obtain injunctive or other equitable relief under appropriate
circumstances. In furtherance of the foregoing, each of Seller and
Buyer hereby waives, from and after the Closing, to the fullest
extent permitted under applicable law, any and all rights, claims
and causes of action (other than claims of, or causes of action
arising from fraud) it may have against the other party relating to
the subject matter of this Agreement arising under or based upon
any federal, state or local statute, law, ordinance, rule or
regulation or otherwise including, without limitation,
Environmental Laws. Buyer further acknowledges and agrees that,
other than the representations and warranties of Seller
specifically contained in this Agreement, the Ancillary Agreements
and the instruments and/or certificates delivered at Closing, there
are no representations or warranties of Seller or any other person
affiliated with Seller either expressed or implied with respect to
the Business, the Assets or the Assumed Liabilities.
8.5 Time Period. If, at any time prior to the
expiration date of the representations and warranties pursuant to
Section 3.3 (the "Expiration Date"), any Seller Indemnified Party
(acting in good faith) delivers to Buyer a written notice asserting
a claim for recovery under Section 8.1(a)(i) (and setting forth in
reasonable detail the basis for such Seller Indemnified Party's
claim), then the claim asserted in such notice shall survive the
Expiration Date until such time as such claim is fully and finally
resolved. If, at any time prior to the applicable Expiration Date,
any Buyer Indemnified Party (acting in good faith) delivers to
Seller a written notice asserting a claim for recovery under
Section 8.1(b)(i) (and setting forth in reasonable detail the basis
for such Buyer Indemnified Party's claim), then the claim asserted
in such notice shall survive the Expiration Date until such time as
such claim is fully and finally resolved.
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ARTICLE IX
MISCELLANEOUS
9.1 Termination and Abandonment.
(a) General. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior
to the Closing:
(i) by mutual written consent of Buyer (for itself and
as agents for its Designees) and Seller (for itself and as
agent for it subsidiaries);
(ii) by Seller if any of the applicable conditions set
forth in Section 5.1 or 5.3 shall have become incapable of
fulfillment, and shall not have been waived by Seller;
(iii) by Buyer if any of the applicable conditions set
forth in Section 5.1 or 5.2 shall have become incapable of
fulfillment, and shall not have been waived by Buyer;
(iv) by Buyer on or after the 181st day after the date
hereof if, through no failure of Buyer to satisfy any of its
obligations under this Agreement, the Closing shall not have
occurred; provided, that if the Closing shall not have
occurred solely as a result of any condition set forth in
Section 5.1(b) or 5.2(d) not having been satisfied, Seller
may, upon notice to Buyer on or prior to such 181st day,
extend the date upon or after which Buyer may terminate this
Agreement under this Section 9.1(a)(iv) to the 271st day after
the date hereof;
(v) by Seller on or after the 181st day after the date
hereof if, through no failure of Seller to satisfy any of its
obligations under this Agreement, the Closing shall not have
occurred; provided, that if the Closing shall not have
occurred solely as a result of any condition set forth in
Section 5.1(b) not having been satisfied, Buyer may, upon
notice to Seller on or prior to such 181st day, extend the
date upon or after which Seller may terminate this Agreement
under this Section 9.1(a)(v) to the 271st day after the date
hereof; or
(vi) by either party if there shall be in effect any
federal, state, local or foreign law or regulation that
permanently enjoins, restrains or prohibits the consummation
of the Closing or if consummation of the Closing would violate
any non-appealable final order, decree or judgment of any
court or governmental body having competent jurisdiction;
provided, that a party shall not be permitted to terminate
this Agreement under this Section 9.1(a)(vi) if the
consummation of the transactions contemplated by this
Agreement, notwithstanding the existence of such law,
regulation, order, decree or judgment, would not be reasonably
likely to have a material adverse effect on such party or on
any entity that would be a subsidiary of such party after the
Closing.
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(b) Procedure Upon Termination. In the event of the
termination and abandonment of this Agreement, written notice
thereof shall promptly be given to the other party hereto and this
Agreement shall terminate and the transactions contemplated hereby
shall be abandoned without further action by any of the parties
hereto.
(c) Survival of Certain Provisions. In the event this
Agreement is terminated in accordance with Section 9.1(a), no party
shall have any liability hereunder to the other party hereto or
their respective directors, officers, employees, subsidiaries or
other affiliates or representatives except for the obligations of
the parties with respect to (A) confidential information in Section
4.14, (B) termination and its effects in this Section 9.1, (C)
notices in Section 9.3, (D) public disclosure in Section 9.8, (E)
expenses in Section 9.2 and (F) governing law in Section 9.13;
provided, that nothing herein will relieve any party from liability
for any breach of any representation, warranty or covenant set
forth in this Agreement prior to such termination. Except as
specifically provided otherwise in this Agreement, the provisions
of this Agreement shall survive the Closing.
9.2 Fees and Expenses. Whether or not the transactions
contemplated hereby are consummated, except as provided herein each
of the parties hereto shall pay its own fees and expenses incident
to the negotiation, preparation and execution of this Agreement,
including, without limitation, attorneys', accountants', brokers'
and other advisors' fees.
9.3 Notices. All notices, requests, demands, waivers
and other communications required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been
duly given if delivered personally or by overnight courier with
delivery charges prepaid, or sent by telecopy, as follows:
(a) if to Seller, to it at:
X. X. Xxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx III, Esq.
Telecopy No.: (000) 000-0000
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(b) if to Buyer, to it at:
Arterial Vascular Engineering, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx X
Xxxxx Xxxx, XX 00000
Attn: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Godward LLP
0000 Xxxx Xxxx Xxxx
Xxxx. 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other person or address as either party shall specify by
notice in writing to the other party. All such notices, requests,
demands, waivers and communications shall be deemed to have been
received on the date of delivery.
9.4 Entire Agreement. This Agreement and the Ancillary
Agreements (including the Exhibits and Schedules hereto) constitute
the entire agreement between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and
understandings, oral and written (other than the Confidentiality
Agreement, dated February 15, 1998, between Seller and Buyer and
the Supplemental Confidentiality Agreement, dated February 26,
1998, between Seller and Buyer).
9.5 Binding Effect; Benefit. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as expressly
provided in Articles VI and VIII with respect to indemnification,
nothing in this Agreement, express or implied, is intended to
confer on any person, other than the parties hereto or their
respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
9.6 Assignability. This Agreement shall not be assigned
by either of the parties hereto without the prior written consent
of the other party; provided, however, that Buyer shall have the
right to assign any or all of its rights to acquire the Stock or
the Assets and to delegate any or all of its obligations to assume
the Assumed Liabilities, and Seller shall have the right to
delegate any or all of its obligations to assume Liabilities
pursuant to Section 4.18, to one or more of its respective direct
or indirect affiliates (each a "Designee"); provided, further,
however, that Buyer's lenders may possess a security or similar
financing interest in and to any or all of the rights of Buyer
under the Transaction Agreements; and provided, further, however,
that Buyer and Seller each hereby guarantee to the other the
performance of their respective Designees.
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9.7 Amendment and Modification; Waiver. Except as
provided in Section 9.17 and subject to applicable law, this
Agreement and any Exhibit attached hereto may be amended, modified
and supplemented by a written instrument expressly identified as an
amendment hereto authorized and executed on behalf of Buyer and
Seller at any time prior to the Closing Date with respect to any of
the terms contained herein. No waiver by any party of any of the
provisions hereof shall be effective unless explicitly set forth in
writing and executed by the party so waiving. The waiver by any
party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent
breach. No failure on the part of either party hereto to exercise,
and no delay in exercising, any right hereunder shall operate as a
waiver thereof. Except as set forth in Section 8.4 hereof, the
remedies herein are cumulative and not exclusive of any remedies
provided by law.
9.8 Public Announcements. Unless otherwise required by
law, prior to the Closing Date, no news release or other public
announcement pertaining to the transactions contemplated by this
Agreement will be made by or on behalf of either party without the
prior approval of the other party, which approval shall not be
unreasonably withheld. If in the judgment of either party such a
news release or public announcement is required by law, the party
intending to make such release or announcement shall provide prior
notice to the other party of the contents of such release or
announcement and shall consult with the other party with respect
thereto.
9.9 Specific Performance. Buyer and Seller each
acknowledge that, in view of the uniqueness of the transactions
contemplated by this Agreement, the other party might not have an
adequate remedy at law for money damages if this Agreement has not
been performed in accordance with its terms. Each party therefore
agrees that the other party shall be entitled to such specific
enforcement of the terms hereof in addition to any other remedy to
which it may be entitled, at law or in equity.
9.10 Bulk Sales Law. Without limiting Seller's
indemnification obligations under Article VIII, the parties hereto
each agree to waive compliance by the other with the provisions of
the Bulk Sales Law of any jurisdiction.
9.11 Section Headings. The section headings contained in
this Agreement are inserted for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
9.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, and all of which together shall be deemed to be one and
the same instrument.
9.13 Applicable Law. This Agreement and the legal
relations between the parties hereto shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts without regard to conflicts of laws principles
thereof.
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9.14 Submission to Jurisdiction. The parties hereby
irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the United States of America located
in Boston, Massachusetts for any actions, suits or proceedings
arising out of or relating to any Transaction Agreement or the
transactions contemplated hereby or thereby (and the parties agree
not to commence any action, suit or proceeding relating thereto
except in such courts), and further agree that service of any
process, summons, notice or document by U.S. registered mail shall
be effective service of process for any action, suit or proceeding
brought against the parties in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying
of venue of any action, suit or proceeding arising out of any
Transaction Agreement or the transactions contemplated hereby or
thereby, in the courts of the United States of America located in
Boston, Massachusetts, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such
court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
9.15 Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent and
only for the duration of such prohibition or enforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provisions in any other
jurisdiction. If any such provision shall be adjudged by any court
or authority of competent jurisdiction to be prohibited or
unenforceable but would be valid and enforceable if part of the
wording thereof were to be deleted and/or the period thereof were
to be reduced and/or the area thereby were to be reduced, such
provision shall apply within the jurisdiction of such court or
authority with such modifications as are necessary to make it valid
and enforceable.
9.16 Certain Defined Terms.
For purposes of this Agreement, the term:
(i) "affiliate" of a person means another person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with,
the first mentioned person;
(ii) "best efforts" shall not mean efforts which require
the performing party to commence any litigation (except as
expressly set forth) or to do any act that is unreasonable
under the circumstances, or to expend any funds other than
reasonable out-of-pocket expenses incurred in satisfying its
obligations hereunder, including but not limited to the fees,
expenses and disbursements of its accountants, actuaries,
counsel and other professionals;
(iii) "coronary" shall be deemed to include, without
limitation, saphenous vein grafts and related products,
activities and applications;
-68-
(iv) "Liabilities" shall mean any and all debts,
liabilities and obligations of any nature, whether accrued or
fixed, known or unknown, absolute or contingent, matured or
unmatured or determined or determinable, and whether or not
required to be disclosed on a balance sheet prepared in
accordance with GAAP;
(v) "Material Adverse Effect" shall mean an effect that
is, or would reasonably be likely to be, materially adverse to
(a) the business, results of operations or financial condition
of the Business taken as a whole or (b) the ability of a party
hereto to consummate any of the transactions contemplated
hereby;
(vi) "person" means an individual, corporation,
partnership, association, trust, incorporated organization,
governmental authority, other entity or group (as defined in
Section 13(d)(3) of the Exchange Act of 1934, as amended);
(vii) "subsidiary" or "subsidiaries" of Buyer, Seller or
any other person means any corporation, partnership, joint
venture or other legal entity of which Buyer, Seller or such
other person, as the case may be (either alone or through or
together with any other subsidiary), owns, directly or
indirectly, 50% or more of the stock or other equity interests
the holder of which is generally entitled to vote for the
election of the board of directors or other governing body of
such corporation or other legal entity;
(viii) "knowledge" with respect to Seller and its
subsidiaries shall mean the actual knowledge of Seller's
executive officers or any other employee of Seller or any of
its subsidiaries who is, or is in a position senior to, the
head of a global technology center of the Business, and the
term "knowledge" with respect to Buyer shall mean the actual
knowledge of Buyer's executive officers; and
(ix) "Disclosure of Invention" means any written, oral
or visual idea, concept or invention of an employee or
consultant of Seller or its subsidiaries (including the
Subsidiaries) in connection with the Business on the Closing
Date, whether or not such idea, concept or invention has been
formally submitted by the inventor(s) to an attorney, agent or
other representative of Seller or its subsidiaries (including
the Subsidiaries) for evaluation as to patentability.
9.17 Schedules. Any fact or item which is clearly
disclosed on any schedule to this Agreement in such a way as to
make its relevance to a representation or representations made
elsewhere in this Agreement or to the information called for by
another schedule or other schedules to this Agreement readily
apparent shall be deemed to be an exception to such representation
or representations or to be disclosed on such other schedule or
schedules, as the case may be, notwithstanding the omission of a
reference or cross-reference thereto. Any fact or item disclosed
on any schedule hereto shall not by reason only of such inclusion
be deemed to be material and shall not be employed as a point of
reference in determining any standard of materiality under this
Agreement. No amendment or supplement to any schedule hereto shall
be taken into account for the purpose of determining whether the
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condition specified in Section 5.2(a) has been satisfied or for any
other purpose, and no such amendment or supplement shall otherwise
limit any of Buyer's rights or remedies under this Agreement;
provided, however, that if (i) Seller delivers to Buyer an
amendment or supplement to any schedule hereto prior to the Closing
Date, (ii) Seller simultaneously advises Buyer in writing that, as
a result of the information set forth in such amendment or
supplement, the condition set forth in Section 5.2(a) will not be
satisfied and Buyer accordingly will not be obligated to consummate
the transactions contemplated by this Agreement and (iii) the
Closing ultimately takes place, then such amendment or supplement
will be given effect for the sole purpose of determining Seller's
liability to Buyer under Section 8.1(b)(i).
[The remainder of this page has been intentionally left blank.
The following page is numbered S-1.]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
X. X. Xxxx, Inc.
By:
Name:
Title:
Arterial Vascular Engineering, Inc.
By:
Name:
Title:
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STOCK AND ASSET PURCHASE AGREEMENT
between
X. X. Xxxx, Inc.
and
Arterial Vascular Engineering, Inc.
Dated as of July 9, 1998
-72-
INDEX OF DEFINITIONS
The following terms shall have the meanings ascribed to
them in the sections referred to opposite such term below:
Term
Section
"1060 Forms"
6.4
"1997 Statement of Operations"
5.2(h)
"Act"
6.1(b)
"affiliate"
9.16(i)
"Ancillary Agreements"
4.11
"Antitrust Division"
4.4
"Antitrust Improvements Act"
4.4
"Asset Patent Rights"
3.1(p)(i)
"Asset Trademark Rights"
3.1(p)(ii)
"Assets"
1.1(b)
"Assumed Liabilities"
1.1(d)
"Auditor"
1.3(c)
"Bard Connaught"
1.1(a)
"Bard Galway"
1.1(a)(iv)
"Bard International"
1.1(a)(ii)
"Bard Ireland"
1.1(a)(iii)
"Bard Japan"
1.1(a)(ii)
"Xxxx Xxxxxxx"
1.1(a)(iii)
"Bard U.S. Pension Plan"
7.2
"Benefit Plans"
3.1(q)(i)
"best efforts"
9.16(ii)
"Business"
Recitals
"Business Contracts"
3.1(k)
"Business Intellectual Property"
3.1(p)
"Buyer"
Recitals
"Buyer Indemnified Parties"
8.1(b)
"Buyer's Objection"
1.3(b)
"Buyer's Savings Plan"
7.6(a)
"Cash Balances"
4.5
"Closing"
2.1
"Closing Date"
2.1
"Code"
3.1(q)(iii)
"Competitive Activity"
4.7
"Competitive Product"
4.7
"Copyright Rights"
3.1(p)(iii)
"CorMedica"
1.1(a)(i)
"Coronary"
9.16(iii)
"Damages"
8.1(a)
"Designee" or "Designees"
9.6
"Directives"
7.7(a)(ii)
"Disclosure of Invention"
9.16(ix)
"Employer"
3.1(q)(i)
"Environmental Claim"
3.1(s)(5)
"Environmental Laws"
3.1(s)(5)
"Environmental Permits"
3.1(s)(5)
"ERISA"
3.1(q)(i)
"Excluded Assets"
1.1(c)
"Expiration Date"
8.5
"Facilities"
1.1(b)(vii)
"Final Statement of Assets and Liabilities"
1.3(d)
"Financial Review"
5.2(h)
"FTC"
4.4
"GAAP"
3.1(w)
"Hazardous Materials"
3.1(s)(5)
"IMPRA Agreement"
4.11
"Indemnified Liabilities"
8.1(c)
"Initial Statement of Assets and Liabilities"
1.3(a)
"Intercompany Account"
4.3(a)
"IP Agreement"
4.11
"Irish Disability Plans"
3.1(q)(xi)
"Irish Pension Plans"
3.1(q)(xi)
"knowledge"
9.16(viii)
"Law"
3.1(n)(i)
"Lease"
4.11
"Legal Proceeding"
3.1(l)
"Liabilities"
9.16(iv)
"Liens"
3.1(d)
"Machinery"
1.1(b)(iv)
"Material Adverse Effect"
9.16(v)
"Material Contract"
3.1(k)
"Material Non-Business Permits"
4.21
"Material Permits"
3.1(m)
"Material Subsidiary Contracts"
3.1(k)
"Mergers Act"
4.4
"METE"
5.1(b)(iv)
"Milu"
1.1(a)(v)
"Net Book Value"
1.3(a)
"Net Intercompany Debt"
4.3(b)
"Net Subsidiaries Receivable Amount"
1.3(e)
"Noncompetitive Period"
4.7
"Non-United States Employees"
3.1(q)(i)(B)
"Patent Rights"
3.1(p)(i)
"Permits"
1.1(b)(vi)
"Permitted Exceptions"
3.1(j)
"person"
9.16(vi)
"Post-Closing Straddle Period"
6.1(c)(ii)
"Pre-Closing Straddle Period"
6.1(c)(i)
"Preliminary Closing Statement of Assets and
Liabilities
1.3(a)
"Proposed Settlement"
6.1(d)(iii)
"Purchase Price"
1.2(a)
"Real Property"
1.1(b)(vii)
"Remedial Actions"
8.1(d)(iii)
"Savings Total Transfer Amount"
7.6(a)
"Savings Transfer Date"
7.6(a)
"Scheduled Employees"
7.1
"Securities Act"
3.2(f)
"Seller"
Recitals
"Seller Indemnified Parties"
8.1(a)
"Seller's Defined Benefit Plan"
7.6(b)
"Seller's Savings Plan"
7.6(a)(i)
"Seller Severance Plan"
7.3(a)
"Seller's Trademarks and Logos"
4.10
"Stock"
1.1(a)
"subsidiary" or "subsidiaries"
9.16(vii)
"Subsidiary" or "Subsidiaries"
1.1(a)
"Tax Claim"
6.1(d)(i)
"Tax Returns"
3.1(i)(i)
"Tax Statement"
6.1(e)(iii)
"Taxes"
3.1(i)(i)
"Taxing Authority"
6.1(c)
"Technology"
1.1(b)(xii)
"Third Party Claim"
8.2
"Trade Dress"
1.1(b)(xiii)
"Trademark Rights"
3.1(p)(ii)
"Transaction Agreements"
3.1(b)
"Transition Agreement"
4.11
"Transferred Employees"
7.1
"Transferred Service"
7.2
"VAT"
6.1(a)(ii)
"WARN"
3.1(o)(v)
"X-trode"
1.1(a)(vi)
